REPORT: THEY INVEST IN PROPERTY, ARE SANGUINE ABOUT CRYPTOCURRENCIES AND ARE KEEN TO SEND THEIR KIDS ABROAD FOR EDUCATION
BY Zoe Phoon
Cross-border real estate continues to attract Asian investors with wealthy individuals in Malaysia, Hong Kong and China most likely to buy, according to global property consultancy Knight Frank’s The Wealth Report.
Incorporating findings of its Attitudes Survey 2018, the latest report is based on responses from 541 of the world’s leading private bankers and wealth advisors, representing roughly 50,000 clients with a combined wealth of US$3 trillion.
The attitudes survey offers an annual snapshot of issues influencing wealthy individuals’ investment and lifestyle decisions.
In terms of wealth management, relationship managers surveyed reported an increase in their clients’ wealth in every region around the world in the 12 months to the end of 2017.
A hefty 94% of respondents in North America saw positive performance in their clients’ portfolios, the broadest gain globally compared to the global average of 72%.
Australasia was second with 91% of respondents answering positively and Asia third with 88%.
Singapore led Asian respondents with 100% reporting overall increase in their clients’ wealth thanks mostly to their own businesses or robust global economic conditions.
New Zealand matched Singapore’s perfect score, contributed most notably by the performance of property investment.
Restrictions on foreign buyers are expected to cool the NZ property market in 2018 but “last call” buying could push prices up further, the report says.
Malaysia and South Korea were laggards of the Asia Pacific region where 72% respondents cited an increase in client wealth although the figure is still in line with the global average.
Wealthy Malaysians were concerned about local elections in 2017.
On investment trends, the report says gold lost some glitter as an investment for most of Asia as only China and Malaysia saw significant reallocation into the precious metal.
Generally, wealthy Asians were the most comfortable taking on increased risk in 2017. But wealthy Malaysians were the least willing to take risk, seen in their increased bond holdings.
Blockchain, the technology behind Bitcoin and other cryptocurrencies, was included in The Wealth Report for the first time. However, attitudes towards the technology were diverse.
Malaysian respondents were more sanguine about increasing the amount of cryptocurrencies held in their portfolios.
When it comes to children’s education, Malaysia once again emerged as the market where their clients are the most willing to send their children abroad.
On property investments, in terms of property allocation as portfolio investment (excluding primary residence and secondary homes), Hong Kong ranked highest in Asia at 47% and Singapore lowest at 35%. Malaysia was at 44%.
As to investing in property in their home country or abroad, Australians felt most comfortable staying home (78%) while only 17% braved overseas markets.
For Malaysians, it’s 67% domestic property investments and 47% abroad.
On future investments, the report says Malaysia, HK and China were above the global average of 34% when considering overseas purchases.
For residential property, Malaysia and China led the region in the number of primary and secondary homes owned by wealthy individuals.
On average, Malaysians owned 3.5 homes each, China 3.3, Singapore 3.0 and South Korea 2.2.
In terms of philanthropy, the desire to give back is growing as Asia gets wealthier.
In China, HK, India, Malaysia and Singapore, education is the main beneficiary compared to the arts in Australia, NZ and South Korea.