If you want to know how the mega-rich are doing in these turbulent times, you could do no worse than to check out the latest Knight-Frank Wealth Report.
Released annually, it looks at global trends in wealth and prime property, who is making money and where they are spending it.
The news for 2012 is the continuing, relentless growth in “plutonomy economics” in which the wealth of the richest 1% grows far quicker than that of the general population.
Knight-Frank, an international real estate agency, claims it first identified this phenomenon in 2007.
Liam Bailey, head of residential research at Knight-Frank, says the 2008 meltdown threatened plutonomy as asset values plummeted, but “ironically the response to the financial crisis did more to revive the value of investments held by the wealthy than improve the position of the general population”.
The report claims the distribution of the world’s super-rich is changing and “it’s not all about China”. It focuses on what it calls the centa-millionaires — the 0.1% of people who have assets in excess of $100-million.
Globally, centa-millionaires own $39.9-trillion in assets, the report says, citing Ledbury Research that estimates there are 63 000 people worldwide who have assets in excess of $100-million.
It predicts that between 2011 and 2016 most new centa-millionaires will come from India (+114%), China (+106%), Russia (+76%), Singapore (+67%), Hong Kong (+65%) and Brazil (+59%).
Ledbury says there are now 18 000 centa-millionaires in the East (South Asia, China and Japan), more than North America (17 000) and Western Europe (14 000). On a country basis the United States will still dominate in 2016 with 17 000 centa-millionaires, but China will catch up fast — numbers are set to double from current levels to 14 000.
The new-found wealth of the East is evident in the dramatic growth of the luxury goods market in China, which is increasing at 35% a year.
The new wealth is accompanied by the rapid growth of cities. The report says even the most conservative estimates suggest that China will have 130 cities with more than one million inhabitants by 2025 — more than the US and Europe combined.
“Of these, around 90 are expected to have more than five million people, while eight will be home to more than 10-million.”
To put this into perspective, New York is the only US city that has a population of more than five million.
It has not been all plain sailing for the stinking rich, though. “The price performance of the prime property markets favoured by high-net worth individuals was far from uniform last year, despite the population of these wealth creators increasing or remaining constant in all world regions, says Bailey.
He says the gap in the annual price growth between the top and bottom of Knight-Frank’s prime residential property table was 45%.
“The majority of locations saw flat or even falling prices and, ironically, some of the largest price drops were in areas with the strongest economic growth.