Number of super rich Malaysians slides

KUALA LUMPUR: The number Malaysia's ultra-high net-worth individuals (UHNWIs) slid by 15 per cent in 2015 compared with a global dip of 3 per cent (about 6,000 people) since the 2008 global financial crisis, according to Knight Frank 10th edition of The Wealth Report 2016.

This is the largest drop on a percentage basis in a survey of 91 countries, which saw the number of super rich rise in 34 countries. The ultra-rich are defined as those with minimum US$30mil (S$41 million) in investable assets.

The number of Singapore's super rich saw a dip of 8 per cent, said Knight Frank's Asia-Pacific head of research Nicholas Holt.

The survey is based on the views of 400 private bankers and wealth advisers who, between them, manage assets for about 45,000 ultra-high networth individuals with combined wealth of over half a trillion US dollars.

On a regional basis, Holt said Asia tops the absolute increase in ultra-high net-worth population. Despite the biggest slide in Malaysia's super rich in 2015, the property consultancy forecasts a 64 per cent growth in rich individuals over the next decade.

"The major concern for many Asians UHNWIs is the global economy, with the uncertainty over the slowdown in China, and a monetary tightening cycle in the United States that threatens wealth generation," Holt said.

The top three concerns among Malaysia's ultra rich are succession/inheritance issues, global economy and taxes.

The next decade is viewed as crucial as wealth creation is expected to slow, which, when combined with an uncertain economic outlook around the world, will require new investment and wealth management strategies.

However, property will remain an important part of their portfolio.

Sixty-five per cent of Malaysian respondents said asset allocation to residential property had increased over the last decade, while the same percentage said allocation would also increase over the coming 10 years, the highest seen across the ultra-rich in Asia-Pacific for both decades.

The survey did not delve into whether Malaysians were putting their wealth locally or abroad but said that among the foreign destinations, Melbourne, Australia has become their No. 1 choice, followed by London and Singapore.

Knight Frank Malaysia's senior manager for international project marketing Dominic Heaton-Watson expects London's residential prices to increase 2 per cent this year, Melbourne 6 per cent and Singapore to slide 3.3 per cent. Hong Kong's residences is expeced to slide 5 per cent and New York to rise 5 per cent.

The number of Malaysia's super rich looking for a new country to live is 26.3 per cent, the second highest after China's 32.1 per cent compared with the overall percentage of 18.4 per cent among Asians hoping to change domicle, the report said.

In a subsequent question-and-answer session, Holt said the comparatively high number of Malaysians seeking to change domicile was due to push and pull factors while Knight Frank Malaysia managing director Sarkunan Subramaniam said "Malaysians are clearly becoming more international."

"Malaysian developers are going abroad to built residentials in London, Sydney and Melbourne, which is also a reason why Malaysians buy from them. We are getting more international," he said.

He did not expect Brexit, a proposal for Britain to exit the European Union, to impact London as destination of choice.

Britain is set to have a referendum on June 23 on whether or not to remain in the union. UK has strong fundamentals, Brexit is not going to be a major factor, said the company's executive director (capital markets) James Buckley.

While much of the report examines Malaysians' interest and purchases abroad, Malaysian properties continue to attract interest among foreign investors with the current weak ringgit, said Sarkunan.

While some felt their investments had depreciated in value, there are others who think now is a good time to enter the market as the ringgit move back to better levels. We are seeing interest from the United States and the Middle East, said Sarkunan.

On the current political uncertainty and its impact on the sector, Sarkunan said: "it is more of a certainty rather than an uncertainty. In the current political scenario, those who know Malaysian politics know that whatever the political drama, the real estate is not that perturbed."