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Research: New wealth will head to western cities

The number of high net worth individuals worldwide is set to swell by 50% over the next 10 years, with Latin America and Asia seeing the fastest growth, according to the Wealth Report 2013.

The number of high net worth individuals worldwide is set to swell by 50% over the next 10 years, with Latin America and Asia seeing the fastest growth, according to the Wealth Report 2013. However, it is the cities of New York, London and Paris that will continue to remain most popular with the ultra-rich.

The report – by real estate firm Knight Frank – estimated the global number of individuals worth $30 million (€23 million) or more will increase to 285,665 by 2022, up from 189,835 in 2012.

Liam Bailey, head of residential research at Knight Frank, said in a statement: "Wealth creation has not been dented by the global economy slowing, nor has this affected the demand for prime property."

The newly wealthy are expected to scramble to buy property in major western cities as well as in their home countries, with New York topping the list of cities that matter to high net worth individuals.

By region it was Europe that proved most popular, according to the study, with 12 of its cities featured in the top 40 ranking, while North America came second with 10. Asia, with nine of the most popular cities, was third.

However, despite growing numbers of HNW individuals in the east, New York and London are expected to hold on to the top spots for at least another decade, said the report.

Knight Frank reckoned the reason for this is that they are seen as safe bets for foreign buyers – properties will retain value even if prices dip in the short term, and this appeals to investors made wary by the financial crisis, or those who have generated wealth in less stable economies.

Bailey said: "Prime residential and commercial property in relatively risk-free locations has always attracted investors in times of economic and political turbulence."

Cities across the globe were assessed on criteria including political influence, quality of life, economic activity and knowledge and influence for the research.

Political influence was judged on the concentration of embassies, international non-governmental organisations, think-tanks and media organisations in a city. The number of top schools and universities, and a status as an international financial hub, also pushed up a city's ranking.

By their own admission the authors said a list like this can only tell a limited amount about a city, but argued it "offers an intriguing snapshot of the world's shifting urban hierarchy".    

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