2017: coming soon

Global luxury spending patterns

Wealth-X introduces its new Luxury Spending Index, produced exclusively for The Wealth Report

Madelaine Ollivier, Ben Kinnard, Wealth-X

The index is based on the proportion of UHNWIs from each of the principal geographic regions who own at least one of the following luxury assets – yachts, private jets, collectables (fine wine, antiques, art, jewellery and watches) – and a luxury automobile worth more than $100,000. This allows us to compare the likelihood of an UHNWI from a particular region owning a luxury asset against the global average.

The overall index is equally weighted across the four asset classes. In a world where many UHNWIs are cash rich yet time poor, yachting continues to provide the ultimate sanctuary for privacy and an opportunity to spend quality time with family and friends. Currently, North American UHNWIs are below the global average for yacht ownership.

However, due to the high levels of wealth in the US we expect ownership to increase. In Asia, there tends not to be such an affinity with the sea, compared with countries in the Pacific and Europe. We see this as one reason for the lower proportion of Asian yachtowning UHNWIs. UHNWIs in Africa and Latin America show a much stronger propensity for private jet ownership (2.0x and 1.59x respectively) than the global average.

Poor commercial travel infrastructure within the regions combined with Global luxury spending patterns Wealth-X introduces its new Luxury Spending Index, produced exclusively for The Wealth Report MADELAINE OLLIVIER, BEN KINNARD, WEALTH-X significant travel distances between business hubs on each continent has, in our opinion, contributed to this high demand.

Our index highlights that, within Africa, the number of UHNWIs with a luxury automobile is 1.55x the global average. Although wealth in Africa is extremely concentrated in certain countries, we see growing potential for luxury brands brands including high-end auto marques. Despite ongoing difficult economic conditions in many emerging markets, the appetite of wealthy collectors hasn’t diminished.

If anything, during periods of economic uncertainty, many wealthy individuals in emerging markets look for tangible investments such as paintings (particularly the contemporary, modern and impressionist genres), which will appreciate in value, as opposed to luxury clothing and leather accessories.

Our Luxury Spending Index shows that UHNWIs in Europe are almost twice as likely to own a collectable compared with the global average. UHNWIs in Asia and Latin America, however, are below the global.