Four of the top five cities favoured by the next generation of HNWs are located in the US, according to a new report from Savills.
The Spotlight on Wealth Trends study, released tomorrow and seen exclusively by Spear’s, looked specifically at wealthy individuals under the age of 40, and the locations where they are choosing to locate their property and wealth.
Savills’ index put New York as the number one destination, with Miami, San Francisco, and Los Angeles also in the top five, with London the only non-American city.
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The index was put together based on four pillars: business, governance and connectivity; wealth clusters and local environment; wealth management and taxation; and lifestyle.
Savills said it chose to focus on the next generation due to the Great Wealth Transfer currently underway, citing figures which estimate $84 trillion is expected to transfer between generations over the next two decades.
Lifestyle factors matter much more to the next generation, Savills said, with it increasingly shaping where HNWs’ property decisionmaking.
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‘It’s about family dynamics and how people choose to order their priorities,’ said Savills World Research associate director, Kelcie Sellers. ‘It all comes down to overall quality of life – shopping and dining are important, but so is education for their children.’
[See also: Philanthropy: how younger UHNWs should give their money away]
Americas first
The dominance of American cities reflects the considerable wealth creation in the country, largely driven by innovation in technology and artificial intelligence.
Sellers identified San Francisco as a city which reflects the new generation of wealth: ‘There is that clustering effect where people want to be with other like-minded people who have also made their money in tech.’
Also typical of this generation, Sellers said, is the desire to have a primary residence often within the city where they have generated their wealth — but then additional properties in locations where quality of life is key.
This explains the appearance of locations such as Aspen, Jackson Hole, and Vail within the index’s top ten Americas wealth hubs – all of which are popular winter and skiing destinations for the ultra-wealthy.
[See also: Uncertainty around snowfall: the best ski resorts to buy property in]
Many next generation wealthy families, the report said, are ‘adopting multi-jurisdictional lifestyles’, in which several locations are represented in property portfolios.
Among the top 30 hubs in Savills’ index are also locations such as Côte d’Azur, San Moritz and The Hamptons.
Locations in the Carribean such as Turks and Caicos, Antigua, Harbour Island, Mustique and St Barts, all popular with HNWs looking for privacy and flexibility, Savills said.
The report added: ‘However, while these destinations score highly on fiscal and lifestyle measures, most Caribbean locations rank lower overall than major North American wealth hubs due to more limited business infrastructure and connectivity.’
