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Booming housing market creates 36,000 millionaires in a year

Britain’s booming pandemic property market created 36,000 new millionaires last year as sellers benefited from skyrocketing sales prices.

The country now has 609,000 high net worth individuals, up 6.3 percent in 2021, according to consultancy Capgemini’s annual study of the world’s rich.

A minimum of $1m (£820m) in investable wealth is required to achieve the grade, meaning individuals own as much wealth beyond real estate as their primary residence.

The combined fortunes of Britain’s millionaires, meanwhile, grew 7.4 percent, reversing modest declines suffered in 2020 due to the pandemic.

It came as property prices were booming in 2021. At the peak of the growth spurt in June, prices rose by more than 13 percent compared to the same month last year. The pace had slowed by December, when the stamp duty holiday was over, but price increases remained high by historical standards, with the average property up 9.5 percent year-on-year.

The value of the average home has risen even further since, hitting another new record of £278,000 in March, up £24,000 from a year earlier, according to the Office for National Statistics.

The UK has the sixth most multimillionaire investors, according to Capgemini. The US tops the list with almost 7.5 million who have wealth of this magnitude, followed by Japan with 3.7 million.

Germany is third at 1.6 million, maintaining its lead over Britain with a 6.4 percent increase in the number of wealthy residents. Rounding out the top five are China with 1.5 million and France, up 8.5 percent, overtaking the UK with a total of 775 million millionaires.

This is largely due to the spectacular 29 percent rise in French stock markets last year, their best performance in two decades. Over the same period, the 15 percent rise in UK stocks has almost doubled.

Globally, the number of ultra-high net worth individuals — those who invest more than $30 million — grew nearly 10 percent for the year. That outpaced the 7.7 percent growth in the number of “millionaires next door” — those with wealth between $1 million and $5 million — and the 8.5 percent increase in the mid-level millionaire bracket in between.

Now, however, rising inflation is slowing the global economy and forcing central banks to raise interest rates, threatening stock markets and house prices.

The world’s rich have lost around 4 percent of their wealth so far this year as “high inflation since early 2022 and talk of central bank rate hikes have prompted stock market corrections that are accelerating,” Capgemini estimates.

“Due to the high exposure to equities, HNWI assets in North America are likely to be hit the hardest, followed by Europe, which is also coping with the ongoing geopolitical crises.”

https://www.telegraph.co.uk/business/2022/06/14/booming-housing-market-creates-36000-millionaires-year/ Booming housing market creates 36,000 millionaires in a year

Russell Falcon

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