India’s ultra-high-net-worth individuals (UHNWI) with net worth over US$ 30 Million is estimated to rise by 58.4%in the next five years from 12,069 in 2022 to 19,119 individuals in 2027. India’s billionaire population is expected to go up from 161 individuals in 2022 to 195 individuals in 2027, according to Knight Frank’s latest issue of the ‘The Wealth Report 2023’.
The Indian high-net-worth-individual (HNI) population, with asset value of US $1 Mn and more, which was recorded at 797,714 persons in 2022 will also rise to 1.65 million recording an impressive 107% in a five – year period, the report said.
In 2022, the global population of UHNWIs declined by 3.8%, after a record climb of 9.3% in 2021, as the wealth and the investment portfolio of the ultra-wealthy were impacted by economic slowdowns, frequent rate hikes and rising geopolitical uncertainties.
The trend was noted in India too, where the UHNWI population registered a decline of 7.5% YoY in 2022 over 2021.
For India, apart from the rise in interest rates, the appreciation of the US Dollar also impacted the growth of wealth. However, the HNI population remained on a growth path registering a YoY growth of 4.5% in 2022 and India’s billionaire population rose by 11% YoY in 2022 compared to the previous year.
Shishir Baijal, chairman and managing director, Knight Frank India, said, “India’s hectic development activities in core and non-core sectors has helped accelerate economic growth in recent times. Aligned to that is India’s significant position as a global start-up hub creating new wealth. The new opportunities emanating from sectors like global manufacturing in India, infrastructure development, technology start-ups etc. will propel economic momentum and help the cause of wealth creation in the country, leading to the rise in the number of wealthy individuals in India.”
The 1% Club Entry For India At US $175,000
According to a study based on the Knight Frank’s Wealth Sizing Model, the total net worth required by an Individual to be among the top 1% wealth individuals in India is estimated to be US $175,000. The wealth needed to join their ranks varies sharply from country to country.
In Monaco, which has the world’s densest population of super-rich individuals, the entry point for the 1% club is US$ 12.4 mn. Interestingly this is double the amount needed of the second place country in this study, Switzerland, which has an entry point at US$ 6.6 mn. For Asia, Singapore has the highest threshold with US$ 3.5 mn followed by Hong Kong at US$ 3.4 mn.
Regional Distribution Of Wealth
In 2022, the dominance of Asia in creation of new wealth saw a slowdown with the UHNWI population declining by 6.5% YoY in 2022. However, three out of the top ten highest growth spots were held by Asian markets of Singapore, Malaysia and Indonesia recording between 5% and 7% rise in the ultra-wealthy population. Further, this region is estimated to witness a growth of close to 40% in its ultra-wealthy count in the next five years. By 2027 Asia will be home to 210,175 UHNIs taking over Europe and standing only second to the Americas.
Middle East Stands Out With Exceptional Growth In UHNWI Population
The Middle East was the standout region with 16.9% growth in UHNWIs (those with US$30m+ in net assets) in 2022. The UAE was the fastest growing country with an 18.1% increase, bringing the number of UHNWIs to 1,116. Saudi Arabia was not far behind with 10.4% annual growth.
Africa also proved resilient with 6.3% growth in UHNWIs whilst Australasia and the Americas remained largely static with 0.7% and 0.2% growth respectively. Asia’s UHNWI population fell by 6.5% yet three of the top 10 highest growth markets were held by Asian countries – Malaysia, Indonesia and Singapore which saw their wealthy populations expand 7-9%.
Europe was the hardest hit region with declines of 8.5% in the number of UHNWIs. Four-fifths of the region’s countries experienced a decline in their UHNWI population. Of the handful of markets seeing their UHNW population increase were Ireland with 3.9% rise and the wealthy safe haven of Monaco with 0.9% growth.
While the UHNWI population contracted last year, the number of high-net-worth individuals (HNWIs), those with US$1m or more in net assets, expanded by 2.9% to almost 70 million worldwide. The top three countries for HNWI growth were Malaysia, Brazil and Indonesia.
Liam Bailey, global head of research, Knight Frank said, “The fall last year in the total number of UHNWIs globally was due in large part to the weak performing equities and bond markets. On the flip side however, 100 prime residential markets globally saw average price growth of 5.2% and luxury investment assets grew 16% which helped steady the decline. The dip is just that. Taking the longer view, the global UHNW population grew by 44% in the five years to 2022 and, although we forecast growth to slow to 28.5% over the next five years, the recent dip will prove short lived as we adapt to a new economic environment.”
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