KUALA LUMPUR, May 30 — The number of Malaysians with at least US$1 million (RM4.6 million) in wealth will nearly double from over 85,000 in 2022 to 164,0839 in 2027, property consultancy Knight Frank’s latest report projected.
Knight Frank’s latest The Wealth Report (Wealth Sizing Model) also forecasted Malaysia’s ultra rich population — or persons having more than US$30 million (RM138 million) in net wealth — to grow from 721 individuals to 1,044 individuals within the same five-year period.
While Malaysia is only predicted to add on about 320 more ultra-wealthy individuals during the 2022 to 2027 period, Knight Frank’s data showed that it is expected to be among the top 10 nations with the fastest pace of growth in that category over the period.
This takes place against Knight Frank’s prediction that the population of super rich and ultra rich throughout the world will continue to grow during those five years from 2022 to 2027.
These were Knight Frank’s forecast for the number of high-net-worth individuals (HNWIs) with minimum US$1 million wealth, and the number of ultra-high-net-worth individuals (UHNWIs) with minimum US$30 million wealth.
Globally, Knight Frank said the number of HNWIs have increased from 48.79 million (2017) to 67.59 million (2021), to 69.5 million or 69,543,783 individuals (2022) and is now expected to grow by 56.9 per cent to cross the 100-millionth mark and hit 109,099,357 by 2027.
While the global UHNWI population had grown faster at 44 per cent during the five-year period from 2017 to 2022 from 402,421 individuals to 579,625 individuals, this ultra wealthy category is expected to grow slower at 28.5 per cent in the next five-year period from 579,625 individuals in 2022 to 744,812 individuals in 2027. Knight Frank also said the number of billionaires worldwide had grown from 2,087 persons in 2017, to 2,629 persons in 2022, and predicted it will grow to 3,372 billionaires by 2027.
How will Malaysia’s ultra rich grow richer?
Dominic Heaton-Watson, Associate Director, International Residential, Knight Frank Property Hub, today said Malaysia’s UHNWIs or ultra wealthy persons are expected to capitalise on a diverse range of sectors including medical, logistics, tech, hospitality, finance and real estate.
He said investment in local and international residential properties remains a key component of wealth creation and income generation.
The number of UHNWIs shrunk globally by 3.8 per cent from 602,553 in 2021 to 579,625 in 2022, and specifically within Asia declined by 6.5 per cent from 160,890 persons to 150,362 persons during the same 2021-2022 period.
But even with such falling numbers of UHNWIs worldwide and in Asia specifically, three countries from Asia — Malaysia, Indonesia and Singapore — actually were among the top 10 countries globally with the fastest growth rate in their number of ultra wealthy persons from 2021 to 2022. Malaysia showed the sixth-fastest growth at 9.4 per cent for this period.
Christine Li, Head of Research at Knight Frank Asia-Pacific, said: “Taking the longer view, the wealth story remains compelling as the region will continue to lead the pack in the unending wealth expansion with plenty more opportunities for UHNWs to discover.”
What would be Malaysia’s HNWIs main investment objectives?
Victoria Garrett, Head of Residential at Knight Frank Asia-Pacific, said the top three countries for growth in HNWIs (those owning more than US$1 million) from 2021 to 2022 were Malaysia, Brazil and Indonesia.
During that 2021-2022 period, Malaysia recorded a 27.7 per cent increase in its HNWIs population from 66,682 persons to 85,126 persons, while Brazil had a 24.2 per cent growth from 422,703 persons to 525,055 persons, and Indonesia had a 22.5 per cent growth from 30,000 persons to 36,742 persons.
“Additionally, 100 prime residential markets globally saw average price growth of 5.2 per cent and luxury investment assets grew 16 per cent. The top 10 global locations for forecast growth are dominated by European and Asian economies.
“The region’s economic growth story will remain urban-centric, and its residential investment landscape will continue to be defined by its prime urban cores. Underpinned by its high rates of urbanisation, investors can look forward to a more sustainable growth trajectory and wealth preservation profile,” she said.
Adrian Yeoh, Executive Director, International Projects, Knight Frank Property Hub, said Malaysian HNWIs’ primary investment objectives are to grow and preserve their capital and to generate income, and will use property investments as a “hedge against inflation” and as a way of diversifying their portfolio.
Yeoh said Malaysian HNWIs prioritise environmental, social and governance (ESG) considerations when investing, and show caution amid the widening funding gap and explore debt funds for refinancing.
According to Yeoh, some Malaysian HNWIs adopt a prudent approach with the aim of reducing debt volumes in their real estate investments.