Hong Kong and Singapore were placed in the top five spots in Knight Frank’s The Wealth Report 2019 released on March 6. The global ranking rates cities according to three categories: wealth, investment and lifestyle.
Despite Brexit concerns, London clinched the top spot overall, replacing New York which was in first place last year. This year, New York was ranked second overall, followed by Hong Kong and Singapore in third and fourth places respectively.
When it came to individual categories, the growth of wealth in Asian cities was most prominent with cities such as Hong Kong, Beijing, Singapore, Seoul and Shanghai taking up top ten spots.
The report predicts that between 2018 and 2023, Asian cities are likely to see the fastest growth in the number of ultra-high net worth individuals (UHNWIs). This is categorised as individuals with net assets of US$30 million ($40 million) or more.
However, when it came to attracting property investment worth US$10 million or more by individuals or family offices, North American cities still dominated, with New York, Los Angeles, Washington DC and Chicago occupying top spots in this category. In the Asia-Pacific region, Hong Kong, Sydney and Singapore were also in the top ten.
“The rise of the Asian-Pacific middle class will be a major driving force for growth and over the coming decade, ensuring that the region will offer an attractive proposition for investors,” says Nicholas Holt, head of research at Knight Frank Asia Pacific.
Meanwhile, the lifestyle category takes into account factors that would influence buyers to purchase homes in a city. Education, security and luxury indicators, including the number of five-star hotels and leading restaurants, were the most important key decision influencers.
London was first in this category with its tertiary education offerings and five-star hotels, sharing the top spot with Singapore. Hong Kong and Tokyo were ranked fourth and fifth respectively.
Looking ahead, Knight Frank also considered cities that are likely to be magnets for future property investment. The selection considers factors such as innovation indicators, wealth forecasts, economic growth and infrastructure. Cities that embody these characteristics are Bengaluru, Hangzhou, Stockholm, Cambridge and Boston.
Knight Frank expects that among them, Bengaluru will see the fastest growth over the next five years. Citing Oxford Economics data, the report states that the city’s real GDP could grow by almost 60% in the next five years. Known for its technology sector, Bengaluru is home to companies such as Microsoft, Hitachi, Samsung, Flipkart, Infosys and Wipro.
Elsewhere, Hangzhou’s transport, storage, information and communication services sectors have more than doubled in the past five years. This is anticipated to grow another 46% over the next five years, according to data from Oxford Economics. In addition, companies there are following in the footsteps of Alibaba which was founded there. There are now 26 tech companies with a valuation in excess of US$1 billion in the city.