Douglas Elliman and Knight Frank recently released The Wealth Report 2022. This is an annual report prepared by the world’s leading luxury real estate companies. It is focused on real estate, wealth creation, investment markets and other financial trends relating to high-net-worth individuals (HNWIs), ultra-high-net-worth individuals (UHNWIs) and prime properties in the top 5% of their respective markets.
You can download the full report here, but we wanted to take this opportunity to highlight a few of their key data findings for 2021 and trends as we continue in 2022.
There was a significant increase in wealth creation over the past year all across the globe. Individuals with net wealth exceeding more than $30 million saw average increases of almost 10%. The world is recovering from the global pandemic, inflation is growing, real estate values continue to rise and new investment opportunities such as crypto are making an impact.
The report states that the number of UHNWIs rose 9.3% in 2021, which equates to 52,000 more people in this top net wealth category. 12.3 of those individuals were located in North America, which shows a strong global spread of wealth.
The annual Attitudes Survey gathers the responses of more than 600 wealth advisors, private bankers, family offices and intermediaries. The goal is to identify trends and expectations for 2022. 83% of respondents expect their clients’ wealth to increase this year and that there will be 28.3% more UHNWIs by the year 2026. This could prompt more wealth taxation focused on assets instead of income.
Cryptocurrency continues to be a major talking point among modern investors. As of this report, there are approximately 8,000 different cryptocurrencies from which to choose. Blockchain technology continues to evolve and present new investment opportunities for the ultra-wealthy. In fact, the report shows that 18% of UHNWIs currently own some kind of crypto or NFTs (non-fungible tokens) as part of a diversified investment portfolio.
Luxury Real Estate
A large share of private capital is being put into real property, with private investors increasing real estate investments by 52% in 2021. Private capital accounts for approximately 35% of all real estate investment transactions. Properties themselves are also evolve as “green” trends and renewable energy are essential to new construction and renovation/retrofitting projects.
The average value of luxury residential property increased by 8.4% in 2021, according to Knight Frank’s Prime International Residential Index (PIRI 100). This represents the highest annual increase since this index started tracking in 2008. We saw value growth in the United States, especially here in Manhattan as our market continues to surge. Some of the fastest-growing markets globally include Dubai (UAE) and Provence (France).
The data suggests the luxury market boom will likely continue in 2022, with prime property prices expected to increase by 10-12% by the end of the year. We are expecting a very active spring and summer market here in New York City.
If you are thinking of buying or selling luxury property in Manhattan this year, it’s important to start planning and preparing as soon as possible. For help with all your NYC real estate needs, contact us today to schedule a no-obligation introductory consultation.