Wealthy Indians grew twice as fast as global peers
MUMBAI: India’s wealthy class grew more than twice than the global average between 2016 and 2017, and trends show it will continue to outpace global as well as Asian projections between 2017 and 2022.
In the prime class of those who were worth $5 million (Rs 32.5 crore) or more, India’s wealthy population rose to 47,720 individuals between 2016 and 2017 – a 21 per cent growth and more than double the global average of 9 per cent. By 2022, it is projected the prime wealthy numbers will increase by 71 per cent, again well above the Asia (61 pc) and global average (43 pc).
In India’s super prime wealthy category ($50 million and above), numbers grew by 21 per cent, more than the global average of 10 per cent; while the super-super rich (worth over $500 million or over Rs 3250 crore) also grew 18 per cent between 2016 and 2017 above the global average of 11 per cent. By end 2022, India is projected to have 340 individuals in this category, at a growth rate of 70 per cent.
These are some of the findings of 12th edition of property consultants Knight Frank’s ‘Wealth Report 2018’ that tracks the growing super rich population in 314 cities across the globe. The report also says that India would be the third largest contributor in Asia with respect to wealthy population after China and Japan.
In sharp contrast, a recent Oxfam report on Global Inequality had said, inequality was among the sharpest in India where the richest 1 per cent account for 58 per cent of the country’s total wealth, as compared to the global figure of 50 per cent; and just 57 ‘dollar’ billionaires in India now have the same wealth ($216 billion) as that of the bottom 70 per cent.The wealthiest of these are Mukesh Ambani ($19.3 billion), Dilip Sanghvi ($16.7 bllion) and Azim Premji ($15 billion).
Based on responses of over 500 bankers and wealth managers, Knight Frank’s Wealth Index has placed Indian cities India at 47th position, Delhi at 73, Chennai at 78 and Bangalore at the 88th spot in a field of 314 cities. At the Global No.1 spot is New York, followed by London and San Francisco.
The index is a summation of valuations based on four factors – wealth, investments, lifestyle and future. In terms of wealth alone, which measures the number of ultra and High net worth individuals (HNWIs) and rate of wealth generation in a city, Mumbai ranks in the in the top 20 with Delhi at 22nd and Bangalore at 26th position, respectively.
Some interesting trends have showed up in the report with respect to prime residential properties and the investments made in this asset class.Reacting to the slowdown in the property markets, India slipped up, according to the Knight Frank report, in the Prime International Residential Index (PIRI) with Mumbai declining to 57th position from 30th in 2016 and Bangalore to 84th spot from 61 in the earlier year.
The appetite of the Indian rich has also declined for investments in property. Property investments was amongst the lowest (17%) contributing factors that led to increase in wealth amongst Indians, compared to 30 percent for Asia and 50 percent globally.
“The inclination to invest in property is lower for the ultra-wealthy Indians compared to their global peers. Only 23 percent wealthy Indians are interested to invest in property (excluding a primary residence and secondary home) in India compared to 43 percent globally,” says Samantak Das, chief economist and research head of Knight Frank India.
However, this has not made Indian cities less costly in terms of residential real estate. Mumbai was 16th among the 20 most costly cities in 2017, dropping one point since 2016.At an average, $ 1 million (Rs 6.5 crore) can buy just 985 square even today in Mumbai!