The COVID-19 pandemic hasn’t stopped global interest in property. Ultra-high-net-worth individuals (UHNWI) grew wealthier in 2020 and they are expected to increase their purchasing of property around the world in the year ahead, according to the just-released Knight Frank Wealth Report.
The annual study found the population of UHNWI grew by 2.4 percent last year and now includes more than 520,000. Asia accounted for the largest chunk of growth, with a 12 percent increase in super-wealthy, which certainly bodes well for Panama, considering the increasing relationship with China and the region.
The United States is still one of the capitals for the ultra-wealthy, but Asia is expected to see the fastest growth of UHNWI, with a 39 percent increase compared to 27 percent globally. Asia is already home to the most billionaires, accounting for 36 percent of the global total. China is expected to see a 246 percent increase in UHNWI by 2025, according to Knight Frank.
Despite the global turmoil, UHNWI is still expected to spend money on the property. Knight Frank’s study found that 26 percent of UHNWIs are planning to buy a new home in 2021. Key markets tracked by Knight Frank are expected to see price increases of up to 7 percent, as buyers seek out new locales, Knight Frank predicts.
Even in 2020, the wealthiest class were buying. While overall property investment was down, “the capital deployed by private investors was still 9 percent above the 10-year average,” Knight Frank found. “This theme will continue through 2021 with a quarter of UHNWIs planning to invest this year,” with development land, residential investments, and logistics among the top targets.
All those factors make Panama Real Estate a prime target for future investment. In addition, Knight Frank found nearly a quarter of UHNWIs are planning to apply for a second passport or citizenship, which will certainly lead some to explore Panama’s new version of the Golden Visa, the Red Carpet visa, which offers an easy track to a permanent resident visa for investors.
More than anything, Knight Frank’s report illustrates that COVID-19 hasn’t damaged the fundamentals of the luxury property. Unlike the 2008 crisis, money is continuing to flow and Panama is set to be a prime beneficiary.