Paris tops the list of the most desirable cities for high net worth individuals, followed by Miami and New York
Paris, Miami, New York, Austin and Dubai are among the Top 5 winners of the BARNES City Index 2023, which lists the most sought-after cities for Ultra High-Net-Worth Individuals (UHNWIs), a category that includes people with at least $30 million in net assets.
Global UHNWI population growth stalls
Against the backdrop of the war in Ukraine, which is impacting the global economy, the UHNWI population at the end of June 2022 was down by 6% compared to the end of 2021, with a total of 392,410 'ultra-rich'. This figure marks a sharp reversal of momentum from the previous year's +14% growth and the first decline in the UHWNI population since 2018.
After the historic growths of recent years, the combined net worth of UHNWI wealth fell by -11% to $41.824 trillion in mid-2022, erasing much of the previous year's gains and implying a decline in their average wealth.
Paris: an intangible benchmark for the wealthiest
While three American cities make up the top five of the BARNES City Index, it is Paris that comes out on top in the searches of wealthy international investors, seduced by its heritage, culture and economic strength. This attraction is further enhanced by the organisation of the 2024 Summer Olympics.
While the high-end real estate market has for decades only concerned certain districts in the west and centre of Paris, it now extends to all 20 districts. 'Buoyed by a brand image that seems impervious to crises, the Paris market is on the way to reaching new heights for truly exceptional properties and the symbolic €40,000/sqm mark has been crossed several times since 2020 by BARNES and sales approaching or even exceeding €50,000/sqm can be expected by the end of 2023,' adds Richard Tzipine, Managing Director of BARNES.
'This renewed interest in the 'City of Light' can be explained in part by the Brexit, which has helped to attract a clientele of Anglo-Saxon and French executives returning from expatriation, and by the return of American buyers, who were held back on the other side of the Atlantic during the confinements,' he continues.
To appeal to this wealthy clientele, it is compulsory to present turnkey properties that meet international standards in terms of facilities and services with impeccable security (caretaker, surveillance system, etc.); the concierge service being a much appreciated 'plus'.
In 2nd place, Miami, the gateway to the Americas
Miami has all the assets to become one of the most influential metropolises in the Americas. Its continuously growing economic activity (cargo and cruise ports, health, aeronautics, technology, etc.) is combined with a first-rate cultural offer for contemporary art and design, notably with Art Basel Miami Beach.
'In addition to being a model of a connected metropolis, its year-round sunny climate, its miraculously preserved Art Deco district by the beach, its dozens of golf courses, its nightlife and its unique Yacht Show have put Miami in the spotlight during the pandemic,' adds Thibault de Saint Vincent, Chairman of BARNES.
The widespread use of telecommuting has highlighted the advantages that have made it the darling of tech companies and hedge funds. With a flourishing economy, a recognised quality of life, a first class health system and schools and universities, outstanding tax advantages and a prestigious market that is still reasonably priced, Miami naturally retains its 2nd position among the most favourable international destinations for property investment in 2023.
The Big Apple completes the podium
Relegated to 7th place in the BARNES City Index in 2022, New York will regain its credentials among wealthy families and investors in 2023. 'After facing turbulence in 2020, with a hazardous management of the pandemic, the flagship city of the American East Coast once again proves its legendary resilience, by regaining the podium of the favourite cities of the wealthy population', comments Yann Rousseau, Director of BARNES New York.
Music, design, gastronomy, New York sets the tone in many areas: its fashion week is now considered one of the three most important in the world, along with Milan and Paris.
Although the Upper East Side and the neighbourhoods bordering Central Park, including Midtown and its ultra-luxury new developments, still have as many followers as ever, the Hudson Yards, TriBeCa and SoHo neighbourhoods now occupy the podium for Manhattan. 'Brooklyn, on the other hand, is being pulled up by Dumbo, Carroll Gardens, Gowanus and Cobble Hill,' he continues.
Dubai 5th: A city with exponential growth
The largest city in the United Arab Emirates with 3.1 million inhabitants (ahead of the federal capital, Abu Dhabi), Dubai has transformed itself in half a century into one of the world's main tourist destinations, a leading financial and business centre and an international mecca for prestigious real estate.
Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Emir of Dubai, recently launched a new RE-Tech platform to further boost investor confidence. 'His vision is to make Dubai's real estate industry one of the best in the world, as part of the Dubai 2040 urbanisation plan, with the ultimate goal of making it the most liveable city in the world,' says Thibault de Saint Vincent. An objective that has already been partially met, as Dubai is now a city of entrepreneurs, and its population, which has been growing at an average rate of 4 to 7% per year for nearly 30 years, is made up of over 90% expatriates.
In addition to its ever-increasing quality of life, taxation is one of Dubai's primary attractions. Resident expatriates are exempt from income tax and VAT is only 5%. And although from 2023, a 9% tax on corporate profits will be introduced for profits over 375,000 dirhams (AED) (about €100,000), this is still well below the global average. 'This cosmopolitan city is constantly on the move, so it attracts many entrepreneurs who see it as the perfect place to set up or develop a business. Income, capital gains, gifts and inheritance are tax-free in the UAE,' he adds. It should be noted that many investors are interested in the Dubai rental market, with expected rates of return of between 8 and 12%.
BARNES CITY INDEX 2023
The BARNES City Index 2023 is based on practical, emotional and financial criteria in 2022 and is a direct reflection of the profound changes that have taken place over the past three years. At the top of the ranking are five cities that have reassured investors during this uncertain period: in addition to Paris at the top of the list, three American metropolises come in 2nd, 3rd and 4th place for their economic strength: Miami (Florida), New York (New York) and Austin (Texas). In 5th place comes Dubai, which joins the very closed club of global safe havens, thanks in particular to its attractiveness to entrepreneurs and expatriate families.
Among the traditional safe havens, London (UK) is ranked 7th ahead of Geneva (Switzerland), Madrid (Spain), Milan and Rome (Italy), confirming a certain bipolarity in this ranking between North America and Europe. With Tokyo (Japan) standing alone in 6th position.
The new cities that are popular with the wealthy are: Istanbul, Barcelona, Athens, Tel Aviv, Doha, Abu Dhabi and Florence. They enter the City Index in 12th, 21st, 33rd, 35th, 39th, 45th and 46th place respectively.
In the press