The UAE is currently in a position to add 50,000 new millionaires between 2020 to 2025, nearly a 22 percent increase in the five years, as per a new wealth report.
The UK-based global real estate consultant Knight Frank’s latest Wealth Report 2021 revealed that the number of millionaires with a wealth of $1 million-plus will increase from 155,929 in 2020 to 205,664 in 2025 and the high net worth individuals (HNWIs) with assets of more than $30 million will increase from 1,305 in 2020 to 1,592 in 2025. On average, 10,000 new millionaires will be added each year.
Taimur Khan, Head of Research at Knight Frank Middle East, said the increase in the population of new millionaires is likely to be a mixture of the two factors. Firstly, the increase in homegrown millionaires as the economic growth gets back to normal and secondly, the rise in migrants, which will certainly consist of HNWIs and ultra-high net worth individuals (UHNWI).
By evaluating the economic growth forecasts in the five years to 2025, the report projects that most of the new millionaires will stem from the transport, IT services, and consumer services sectors. However, the population of millionaires in the UAE fell by nearly 38,000 last year from 195,304 in 2019 to 157,234 due to the impact of COVID-19.
“The pandemic has impacted the fortunes of many in the Middle East, and Middle Eastern HNWIs and UHNWIs were not spared, with the total number of each decreasing by 11.3 percent and 10.1 percent in 2020, respectively. However, this decline was not uniform across all countries, In Saudi Arabia over this period, the number of UHNWIs increased by 9.6 percent, the 10th fastest growth rate globally. In fact, its UHNW population has grown by 227 percent over the last five years, the fastest growth rate globally over this period.”
Globally, the number of UHNWIs, those with $30 million or more, is predicted to grow by 27 percent in the next five years to 2025, taking the population to 663,483 from 521,653 last year. While the population of millionaires owning $1 million-plus wealth will jump 41 percent between 2020 to 2025, rising from 48,505,781 last year to 68,185,442 in 2025.
Asia is expected to witness the largest rise with a growth of 39 percent, led by Indonesia (67 percent,) and India (63 percent,). Europe will retain its position as the second-largest wealth hub with 23 percent growth, bringing the total number of UHNWIs to 185,860.
In the Middle East, Knight Frank expects the number of UHNWIs to increase by 24.6 percent, in the five years to 2020, with the region expected to remain the fourth largest wealth hub in the world. The population of millionaires with $10 million-plus assets will be 1.445 million by 2025. Similarly, UNHWIs owning $30 million-plus wealth will have a 25 percent increment.