Hong Kong multimillionaire population drops as liquid assets and net worth decline in 2023: Citibank
- Median liquid assets of people with more than HK$10 million (US$1.28 million) in wealth dropped by HK$1 million to HK$4.5 million this year, survey says
- Although their population fell slightly, multimillionaires account for one in 14 Hongkongers aged between 21 and 79, Citibank says
The typical Hong Kong multimillionaire lost HK$1 million (US$128,000) in liquid assets this year as their median net worth declined slightly, according to Citibank Hong Kong research. The overall population of such wealthy individuals also fell.
The median liquid assets held by the city’s multimillionaires – defined as individuals with net worth of more than HK$10 million – dropped to HK$4.5 million, as of the end of June, down from HK$5.5 million at the end of 2022, the bank said in a report released on Wednesday.
Median net worth fell slightly to HK$16 million from HK$16.5 million at the end of 2022, but is still on a general upwards trend from HK$15.7 million in 2021 and HK$15.5 million in 2020, the report said.
Hong Kong’s multimillionaire population fell to 408,000 as of June, compared with 410,000 at the end of 2022, against a backdrop of sluggish economic performance and struggling property and stock markets.
Individuals with more than HK$10 million in wealth account for 7 per cent, or one in 14, of the city’s population aged between 21 and 79, Citibank said.
The survey, completed by 1,700 residents in that age range, found that multimillionaires hold more than 70 per cent of their net assets in property, and the rest in liquid assets.
Nearly half hold their liquid assets in cash, followed by 30 per cent in stocks, 19 per cent in funds and 3 per cent in bonds.
The popularity of mutual funds and bonds has spiked in the past three months, jumping 15 per cent and 9 per cent, respectively. High interest rates and stable returns have driven this trend, said Josephine Lee Kwai-chong, head of retail bank at Citibank Hong Kong.
Though they may have less wealth, multimillionaires do not plan to leave their children hanging.
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“The majority of multimillionaire parents expect to send their children abroad to study, as well as help pay for things like a house and wedding,” Lee said. “With university alone costing half of the average savings, parents need to plan ahead.”
Nearly 70 per cent of respondents plan to send their children overseas for education, an investment they expect to cost more than HK$2 million across four years of university studies.
Hong Kong multimillionaires are starting early when it comes to planning for those expenditures, and they also expect to splash out HK$380,000 on a wedding and provide HK$2.4 million to help their children purchase their first homes, according to the survey.
“To send one child to university is already half the amount of [affluent households] liquid assets – hence why most parents start early, setting up bank accounts and using investment tools for their children,” Lee said.
When it comes to expectations for financial support, parents are more generous than the children themselves expect. For example, 54 per cent of parents will provide support to pay for their child’s wedding, whereas only 40 per cent of children expect this support.
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While most families will provide hefty financial support for their children, they were less willing to finance the raising of their grandchildren. While 40 per cent of the children of affluent parents said they look forward to financial support for raising the next generation, only 30 per cent of their parents are willing to provide such aid to their grandchildren.
