New Zealand's wealthiest individuals are losing money
New Zealand’s richest are getting poorer.
Over the past year, there has been a 1 per cent drop in the number of wealthy people in the country – from millionaires, right through to billionaires.
Now, while 1 per cent might not seem like a lot, the loss is in excess of $1.2 billion.
According to the latest Wealth Report, there were 89,900 millionaires, 2610 multi-millionaires ($10m+), 793 Ultra High Net Worth Individuals (UHNWI) ($30m+), 81 centa-millionaires ($100m+), and three billionaires in 2014.
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One year later, the figures dropped to 89,000 millionaires, 2580 multi-millionaires, 80 centa-millionaires and 785 UHNWIs. The number of billionaires remained the same.
However, this declining trend is not set to continue, with predictions that the number of wealthy people in New Zealand will increase 42 per cent by 2025.
Businesswoman Diane Foreman believed the increase in the rich moving to New Zealand was because they felt it was a “safe haven”.
“New Zealand is a safe haven – that’s how it’s viewed by the rest of the world.
“It’s not only a safe haven for their money, it’s got great infrastructure and a very honest legal and accounting system.”
She also believed geographical isolation, lack of corruption and a stable government were factors in attracting wealthy people, she said.
“I believe they think ‘It’s a great place for me and my money.'”
Foreman is among New Zealand’s wealthiest, with an estimated worth of $180 million.
According to the 2016 Forbes rich list, the two wealthiest Kiwis are worth a combined $15.1b.
Graeme Hart – a tow-truck driver turned investor – is estimated to be worth $10.4b.
He is New Zealand’s richest individual and is ranked 178th richest person in the world.
Meanwhile, Singapore-based Kiwi Richard Chandler – former chief executive of the Sovereign Group – has an estimated worth of $4.7b and is the world’s 638th richest person.
By comparison, number one on the Forbes list and richest person on the planet, Bill Gates, is worth about US$77.9b ($111.4b) – more than seven times the combined worth of New Zealand’s two wealthiest people.
Knight Frank Asia Pacific head of research Nicholas Holt said a lot of countries experienced a drop in wealth between 2014 and 2015.
“Globally, there was a drop of 3 per cent . . . and there are a number of factors that contributed to that as there were a number of things weighing on the economy.”
The weakening New Zealand dollar led to a “flat performance” of the wealthy in New Zealand, he said.
Holt agreed with the research that the next 10 years would be a decade to watch.
“In terms of going forward, growth prospects are positive for the New Zealand economy, so it’s a positive outlook,” he said.
He believed there would be more entrepreneurial opportunities over the next decade, he said.
There was an increasing importance on the impact of wealth on migration, Holt said.
New World Wealth head of research Andrew Amoils said the “root cause” of the drop in wealthy individuals was the weak New Zealand dollar.
“On the positive side, the New Zealand stock market performed relatively well, and several millionaires moved to New Zealand in 2015.
“This helped prevent a bigger drop.”
The survey showed that, globally, the rich believe that succession and inheritance issues, wealth taxes and the global economy will be major risks to wealth creation and preservation over the coming years.
Residential real estate accounted for a quarter of the average UHNWI’s “investable wealth”, while commercial property made up 11 per cent.
However, interest in commercial property is also growing strongly, with 47 per cent of all wealth advisors predicting an increased portfolio allocation by their clients over the next 10 years.
Offices and hotels are predicted to remain the investments of choice, although warehousing and logistics could overtake shopping centres and high street retail, according to the survey.
The wealthy were also concerned about the increased scrutiny or their affairs – by the public and authorities.
As a result, almost 70 per cent said their clients had become more conscious about displaying their wealth in public.
A whooping 80 per cent expected to see an increase in their clients sending their children overseas for education during the next decade.