The Wealth Report: A Middle East perspective

Against the sombre backdrop of the Covid-19 pandemic, this year’s Wealth Report presents our insights on private wealth, its impact on property markets and the evolving trends and opportunities that undoubtedly lie ahead in real estate and beyond.

This year’s publication assesses how the fortunes of UHNWIs are changing, where they spend time, what they invest in and what they are likely to do next. From policymakers to investors, a lack of insight into the behaviour and attitudes of the “1%” risks a serious misreading of economic trends. This is the knowledge gap we fill.

The key takeaways from the report this year are as follows:

• 26% of ultra-high-net-worth individuals (UHNWIs) globally are planning to buy a new home in 2021, a sharp increase from the 21% revealed in 2020. In the Middle East region, 31% of UHNWIs are planning on purchasing a property in 2021. Such demand from Middle Eastern UHNWIs stretches across the world, with the UK, US, Turkey, Spain and the UAE being the top five locations where such purchases are planned.
• Despite prime prices softening in almost all key markets in the Middle East, demand for prime residential property in Dubai has remained robust throughout 2020. There are also early indications that we are seeing these markets being to enter new market cycles. For example, whilst Dubai’s prime residential market saw prices decrease by 5.9% in the year to November 2020, we are beginning to see signs of a recovery in price performance in some prime sub-markets. In the six months to December 2020, apartment and villa prices on the Palm Jumeirah increased by 5.1% and 9.4% respectively. Over the same period, villa prices in District One have increased by 3.5%. Other prime markets such as Downtown Dubai and Emirates Hills are also showing similar signs of improvement in market performance. More so, in contrast to the mainstream market, prime transaction volumes increased by 7.9% in 2020 compared to 2019.
• The number of ultra-high-net-worth individuals (UHNWIs), those with US$30m or more, around the world is predicted to grow by 27% in the next five years to 2025 taking the population to 663,483. Over the same period, the number of millionaires globally is set to rise by 41%. In the Middle East, we expect the number of UHNWIs to increase by 24.6% in the five years to 2020, with the region expected to remain the fourth largest wealth hub in the world. The number of Billionaires in the Middle East is also expected to increase by 36% over the next five years and almost 330,000 Dollar millionaires will be created in the Middle East, an estimated increase of 29.4% from 2020 levels.
• The pandemic has impacted the fortunes of many in the Middle East, and Middle Eastern HNWIs and UHNWIs were not spared, with the total number of each decreasing by 11.3% and 10.1% in 2020 respectively. However, this decline was not uniform across all countries, In Saudi Arabia over this period, the number of UHNWIs increased by 9.6%, the 10th fastest growth rate globally. In fact, its UHNW population has grown by 227% over the last five years, the fastest growth rate globally over this period. As the region continues its various economic diversification programs, we expect that there will continue to be significant growth in the number of HNWI, UHNWI and Billionaires residing in the region.
• London claims the top-spot for the largest number of homes considered ‘prime’ in each global city, with over 68,000 homes worth £2m or more. Dubai comes in second place globally with 42,356 homes.
• The Knight Frank Attitudes Survey highlights that a quarter of ultra-high-net-worth individuals (UHNWIs) plan to invest in commercial real estate assets in 2021. In the Middle East, this number sits slightly lower at 23%. Looking ahead, for Middle Eastern UHWNIs the logistics, residential private rented, healthcare and data centres sectors are set to garner greater levels of interests.

Read our Wealth Report 2021 Middle East Supplement here

Photo by ZQ Lee on Unsplash