_Knight Frank launches 2019's edition of The Wealth Report

We provide a whistle-stop tour of the sharpest insights inside of the 2019 edition of The Wealth Report and predict the shape of the year ahead.

At a glance:

Despite a darkening economic outlook, wealth creation will remain a constant in 2019. The global UHNWI population is forecast to rise by 22% over the next five years, meaning an extra 43,000 people will be worth more than US$30 million by 2023.

The rise of the super-rich

Existing UHNWIs expect their wealth to increase over the next 12 months, with confidence most marked in the US where 80% expect to be better off.

Hard Brexit, no Brexit, Brexit-lite: whatever the outcome, London will remain the leading global wealth centre in 2019. With the world’s largest UHNWI population, the city sweeps the board in our annual City Wealth Index, pushing its only serious rival, New York, into second place.

Asia’s strong economic performance (it hosts eight of the top ten countries with the fastest growing UHNWI populations) means 2019 will be the year the number of US$ millionaires globally exceeds 20 million for the first time. India will lead the annual growth with 39%, followed by the Philippines (38%) and China (35%).

Wealth flows around the globe

As wealth increases, 2019 will see governments settle into two camps: the first will try to attract more of it; the second will seek to push it away.

In the former camp sits Italy, where a new “nondom” regime will kick fully into gear this year, resulting in a growing band of wealthy migrants enjoying la dolce vita in return for a fixed tax payment of €100,000 on their global income.

Conversely, Singapore, Australia, New Zealand, Canada, the UK and others will make wealthy non-residents jump through ever larger hoops to access their property markets.

Future investment trends

As wealth moves more rapidly around the world, investors will become increasingly active in their investment strategies. Rising interest rates and the end of quantitative easing mean we are reaching the end of the “everything bubble”.

In the past decade it was enough to buy classic cars, art or property and the generosity of central banks would help deliver super-charged returns.

As this process unwinds property investors will become increasingly focused on income, asset management and development opportunities

Global geopolitics

The desire for mobility means wealth exporting nations will begin to watch their currency and foreign reserves increasingly closely.

Recent capital controls in China will remain in place, while in India a two-year 144% increase in outbound remittances will create risks of additional controls – but the strength of economic growth will delay action for 2019 at least.

As some governments race to attract wealth, a backlash will grow with the OECD and the EU, among others, placing more countries under the microscope as efforts to combat tax evasion increase.

Citizenship schemes

Hoops or not, the wealthy will continue to demand access to global markets, especially as emerging economies see growth rates slow and the search for diversification grows.

A record 26% of global UHNWIs will begin to plan for emigration this year, and to help them a record number of countries will offer citizenship and residency through investment schemes, with Moldova and Montenegro the latest to offer themselves as wealth havens

Sectors and cities to watch

Investors in 2019 will increase their exposure to education facilities, student housing and “last mile” logistics property, as well as targeting office investment in key tech and innovation markets.

Expect slower price growth in key luxury residential markets, with more markets seeing values fall this year. As values adjust, buyers will feel the balance of power shift in their favour.

The search for deals will combine with currency movements to propel more purchasers into 2018’s “most unfashionable market” – London.

Luxury investments

Beyond property, interest in the world of collectables will continue to expand into new areas. Expect a boom in investment in one drink in particular.

A 500% rise over the past decade in the Knight Frank Rare Whisky Index, new direct flights between Edinburgh and Beijing, 40% annual growth in sales of Scotch to India and China, and a new record sale price of £1.2 million for a single bottle should have Scotland’s distillers raising a dram or two.

Blockchain in action

2019 will be the year when theorising over the potential impact of blockchain gives way to an appreciation of what it can achieve: helping to prove the authenticity of the US$2 trillion of luxury goods sold annually; confirming the ownership of art; enabling fractional ownership of some of the world’s most desirable collectibles; oh, and facilitating the creation of US$170,000 digital cats (yes, really).

For in-depth views on the topics and issues raised, read or download the latest edition of The Wealth Report 2019.