Real Estate News - India

The strong growth in the stock market and real estate prices is swelling the ranks of millionaires in the country, which had 1,00,015 high networth individuals (HNWIs) last year, a 20.5 per cent increase in the number and second only to Singapore with a 21.2 per cent surge.

A high networth individual has financial assets (excluding primary residence) exceeding US$ 1 million (Rs 4.1 crore). Indian had 83,000 dollar millionaires in 2005.

Releasing these figures, the latest World Wealth Report by Merrill Lynch and Capgemini attributes India’s rapid wealth creation to its continued strong expansion, with real GDP growth of 8.8 per cent last year. The economy is driven by a robust 9.1 per cent private consumption, up from 6.6 per cent in 2005 and strong manufacturing and service sectors, it says.

Double-digit growth in the number of HNWIs was also recorded in Russia, the UAE, South Africa, Israel and the Czech Republic, apart from recovering Asian economies like Indonesia, South Korea and Hong Kong. Together these emerging economies made up the top 10 fastest growing markets globally for HNWI population. China, with GDP growth of 10.5 per cent last year, saw a 7.8 per cent increase in the ranks.

“Strong economic growth and a robust performance in many of the region’s stockmarkets worked together during 2006 to drive wealth creation in the Asia Pacific Region,” said Pradeep Dokania, managing director of Global Private Client at DSP Merrill Lynch.

“The globalisation of wealth creation has accelerated,” said Bertrand Lavayssière, group director of Capgemini Financial Services. “If 2005 was characterised by a flow of investment to international funds from HNWIs, 2006 ushered in a new era whereby emerging economies leaped ahead with direct foreign investment, strong domestic demand, and hefty stock market gains.”

The wealth of the world’s HNWIs increased 11.4 per cent to $37.2 trillion in 2006. Their number in the world rose 8.3 per cent last year to 95 lakh and the number of ultra high net worth individuals (Ultra-HNWIs) grew by 11.3 per cent to 94,970. An Ultra-HNWI is a person whose financial assets exceed $30 million (Rs 123 crore).

Asia was home to some of the fastest-growing markets in terms of HNWI population, occupying five out of the top 10 spots globally, a repeat of its 2005 performance.

The HNWIs globally shifted more money into property investments, at times liquidating some of their alternative investments to fund these real estate opportunities. “This trend was most dramatic in the Asia-Pacific where 29 per cent of HNWI assets were held in real estate, up from 16 per cent in 2005,” the wealth report says.


• A high networth individual (HNWI) has assets exceeding $1 million (Rs 4.1 crore)

• An Ultra-HNWI has assets exceeding $30 million (Rs 123 crore)

• Number of HNWIs worldwide last year was 95 lakh , with $37.2 trillion

• Number of Ultra-HNWIs 94,970

• HNWIs shift more money into real estate, 29% of investments in Asia

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