By Rohit Sharma
Australia is the destination of choice for Asian Ultra-High-Net-Worth Individuals (UHNWIs) who plan to buy a new home overseas or invest in property in the coming year, based on a Knight Frank survey of 600 private bankers and wealth advisers who between them manage over US$3 trillion of wealth for UHNWI.
On Wednesday Knight Frank launched its Wealth report in which it said, for Indian UHNWIs, United Kingdom (UK) with 74% preferring to purchase in that country while 39% responded favourably to United States (US). Both these places are of high interest for the India ultra-rich from business as well as leisure and lifestyle purposes. These also remain the top choices of investment or self -use purchase for the coming years.
According to the Attitudes Survey in Knight Frank’s Wealth Report, 25% of Asian UHNWIs, plan to buy a home outside their country of residence by 2020, higher than the global average of 22%. 18% of Indian UHNWIs showed an affinity towards purchasing homes outside of their domicile country.
Of those, 45% indicated they would buy in Australia, 33% say the UK and 32% chose Canada. These buyers are mostly from China, Hong Kong, Malaysia and South Korea, with one in three indicating their interest to buy a residential property overseas this year or next.
Less than 1 in 20 in Australia and New Zealand plan to buy a home internationally, and 39% indicated they would buy in Australia, according to the survey responses from the wealth managers. Australasians largely prefer to buy in their home country rather than overseas.
“The ultra-wealthy are becoming increasingly strategic in their destination choices, a natural response to global uncertainty and political upheavals. As a result, they are investing in additional homes in cities and countries where they see greater levels of stability,” said Victoria Garrett, Head of Residential, Asia Pacific.
“Australia continues to draw significant interest from both domestic and overseas buyers, ticking all the boxes not only for stability but also for lifestyle, education, wealth preservation and capital growth,” Garrett adds.
BEYOND HOMES – PROPERTY INVESTMENTS
Overall, Asia-Pacific UHNWI investors still prefer to invest in their local market. According to wealth managers surveyed, 71% of respondents from Taiwan and 68% from Australia have property investments domestically. In 2019 to 2020, 43% of respondents from South Korea, 41% from Malaysia and a similar proportion in the Philippines plan to invest in their home country.
For those looking to invest in property (excluding first or second homes) abroad, Australia is also the most popular choice, with 41% of wealth managers indicating that UHNWIs may invest down under in 2019 or 2020. The UHNWIs’ second choice is the US and their third in the UK.
According to the survey, around one in three from China (31%), Malaysia (33%) and South Korea (32%) are likely to invest overseas in 2019 or 2020. When asked about the percentage of UHNWIs who have property investments (excluding first and second homes) outside their country of residence, 40% of the respondents say Malaysians, 39% indicated Indonesians and another 39% say Hong Kong.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, “Indians are progressively increasing their global footprint with UHNWIs getting attracted to the quality of services in these countries. We have seen a growing trend in the purchase of properties amongst India’s wealthy across the globe. It would be worthwhile to point out that Indians are contributing significantly to global wealth creation.”