One in seven in Hong Kong is a millionaire as property and stock market rallies boost wealth
Real estate accounts for 70pc of millionaires’ assets, with each owning 3.2 properties on average, according to a Citibank survey
Hong Kong had a million millionaires last year, up 15 per cent from a year earlier, 68,000 of whom have at least HK$10 million (US$1.27 million), according to a Citibank study released on Thursday.
The study defines millionaires as those with liquid assets – deposits, mutual funds and stocks and bonds – of HK$1 million. It was conducted from September to November last year and involved 4,139 Hongkongers and 200 mainlanders.
Hong Kong’s population in 2017 was 7.36 million.
The growth in the number of millionaires was a result of the rising stock and property markets last year. The Hang Seng Index rose 36 per cent in 2017 while property prices rose 14 per cent, creating more wealthy men and women in Hong Kong.
“Looking ahead, the number of millionaires will increase in 2018,” said Lawrence Lam, head of retail banking at Citibank Hong Kong. “The stock market sentiment is strong while property prices will keep rising even with the interest rate rises.”
Property was the main investment vehicle for mainland and Hong Kong millionaires, with about 70 per cent of their assets in real estate. On average, each Hong Kong millionaire had 3.2 properties while the mainland millionaire had 3.7.
It is worth noting that a HK$1 million does not fetch much in terms of property in the city. Last week, a 209 square feet apartment, slightly bigger than a standard shipping container, in the Pok Fu Lam neighbourhood sold for HK$37,651 per square foot, a record price for so-called micro-apartments in the city.
But Hong Kong’s richest people have more overseas properties than their mainland counterparts – 1.3 versus 0.7 per cent for Chinese millionaires.
Stocks and cash were their other major investments. The city’s millionaires had 14 per cent in cash and 9 per cent in stocks, while mainland millionaires had 12 per cent of their assets in cash and 7 per cent in stocks.
The sources of their wealth are different, however. Hong Kong millionaires said 55 per cent of their money was generated from their salary, while mainlanders said 55 per cent accumulated their wealth from running a business. The rest was from investments and inheritance from parents.
About 71 per cent of mainland millionaires run their own business while only 21 per cent of Hong Kong millionaires owned a business.
Among the concerns raised by the two sets of millionaires, the bank found Hong Kong’s were most unsatisfied about the living environment and education system in the city, while mainlanders were most concerned about their medical system.
Lam said 17 per cent of millionaires in Hong Kong plan to migrate to other countries compared with 26 per cent from the mainland, with Australia their number one destination.
In terms of their banking habits, Hong Kong’s affluent group engaged in mobile banking a lot more than the general public, the report showed.