Multimillionaire surge in UAE and Australia, but drop in France
While the UAE, Dubai specifically, added 400 people to its multimillionaires list this year, High Net Worth Individuals (HNWIs) increased their presence Down Under by an extra 11,000. AMEinfo takes a closer look at what’s attracting HNWIs to these shores and what’s turning them away from other countries in droves.
According to the 2017 Word Wealth Report released on Thursday, the number of HNWIs in the UAE reached 55,700 in 2016, compared to 55,300 in 2015; an increase that boosted the combined wealth of this group of individuals from $193.2 billion in 2015 to $195.3bn in 2016.
In 2014, however, combined wealth sat at $227.9bn, so does Dubai still hold appeal?
Anthony Hobeika, Chief Executive Officer, MENA Research Partners, tells AMEinfo that Dubai’s economy back in 2014 offered a fast-growth environment for investors, growing in a large number of diversified sectors encompassing logistics, technology, healthcare, education and retail, to name only a few.
While numbers increased last year, they are well below the 2014 figure, which stood at 65,500 and this is mainly attributable to global economic activity.
“In fact, during the period extending from the second half of 2014 ’til the end of 2015, oil prices have largely declined from $100 per barrel levels to as low as $20 to $30. Such a drop has largely impacted the government spending on the local economy and the overall non-oil sectors, in particular the cyclical ones, such as real estate, construction and financials,” says Hobeika.
“Such an economic situation leads not only to a drop in the number of new HNWIs, but also, by incurring a wealth destruction, induces an exit of HNWIs from the list (as their wealth drops below the threshold of classification),” he adds.
However, in the future the Emirates can look forward to a brighter forecast and a return of HNWIs, thanks in no small part to Vision 2020.
“On the back of its leadership vision, Dubai is now on the radar screen of leading global investors, having become among the leading global business set-ups, in terms of ease of doing business and level of competitiveness,” Hobeika says.
“From a software and hardware infrastructure perspective, Dubai presents to its HNWIs access to the most advanced technologies, inching, for example, to become a leading smart city by global standards. Its governmental institutions adopted large scale e-initiatives aiming to facilitate investors’ procedures to set-up and run their businesses from the Emirate.”
Hobeika also notes that Dubai is at the crossroads of advanced and emerging markets, serving as a hub to link East and West, helping to turn the emirate into a major touristic and trade hub.
“Moreover, Dubai has become a global destination for leisure, having attracted leading global entertainment concepts and a leading retail hub, attracting one of the widest arrays of brands on a global scale,” Hobeika adds.
Why the number of millionaires is going up Down Under
An estimated 11,000 millionaires moved to Australia in 2016, according to CNN Money, citing a new report by wealth research firm New World Wealth. “The US and UK have traditionally attracted the highest number of wealthy migrants. But the allure of Australia has increased in recent years, especially for wealthy citizens of China and India,” it read.
According to a Knight Frank report released in 2017, Australasia is expected to see a 70 per cent rise in HNWIs between now and 2026, thanks not only to its healthy economy, but also the attractive lifestyle it offers. “The ongoing migration of wealthy people to Australia and New Zealand is helping to underpin wealth populations,” read the report, quoting Andrew Amoils, Head of Research at New World Wealth.
“In addition, there has been some recovery from the commodity price crash of 2015, along with resilient stock market performances and robust real estate returns. In the future, this region will have the attraction of good economic fundamentals and safe haven status,” he added.
CNN Money says that migrating millionaires are drawn to the sunny Australian lifestyle, as well as the country’s highly rated health care system, which is considered to be in better shape than those in the US and UK.
Its geographical location allows for ease of business in emerging Asian countries such as China, South Korea, Singapore and India and it’s isolated from conflicts in the Middle East and the refugee crisis in Europe. It’s also considered a safe place to live and raise children.
Bidding au revoir
By contrast, France is suffering from a major exodus of rich individuals, with more than 12,000 millionaires leaving France last year, CNN Money reports. In total, the country has experienced a net outflow of over 60,000 millionaires since 2000.
The report cited religious tensions as one reason for the exodus, along with a sluggish economy and terror attacks.