Hong Kong and Singapore to Lead Growth of Asia’s Wealthy Population by 2028

Asia’s wealthy population is set to grow faster than any other region in the world by 2028 as the rate of growth – equivalent to around 35 new UHNWIs each day – will bring the total to about 230,000, almost 40% larger than it was in 2023.

“At that point, only North America will boast a larger community of ultra-wealthy people, but at current rates of growth, it won’t be long before Asia takes the crown,” a latest report entitled The Wealth Report, which was released by global real estate consulting firm Knight Frank.

Competition to host Asia’s newly minted wealthy is hotting up, with Hong Kong and Singapore leading the charge. Singapore has utilised tax incentives and a business-friendly regulatory regime to encourage 1,100 family offices managing more than $4 trillion to move to the city-state, up from about 100 less than a decade ago.

Citing a 2023 report from Boston Consulting Group (BCG), Knight Frank said that Hong Kong has long been the region’s dominant wealth hub and the city’s wealth management industry posted the fastest growth in assets under management in the five years to 2022 until “the winds changed” and some wealthy individuals began moving funds to Singapore.

The Hong Kong authorities responded with a set of incentives as part of investment migration programme in October last year which is aimed at family offices and residency for people investing at least $3.84 million in local stocks or other assets.

The Capital Investment Entrant Scheme is likely to be open from the middle of this year onwards, and will have a central role in bolstering Hong Kong’s wealth management industry, Frank Night report said.

Though family office numbers have risen in Singapore, the link to direct spending and investing is not clear cut. Last summer, the Monetary Authority of Singapore (MAS) tweaked the incentives on offer to encourage family offices to invest in the country’s equity markets, including those aimed at encouraging investment in local climate-related projects.

Impact on Residential Property Market

Family office arrivals have had little impact on the residential property market either, according to MAS officials. The challenge for the city is to encourage these private institutions to put down deeper roots – which should lead to more widespread investment.

“Despite these challenges, the wealth management industry is likely to swell rapidly as financial wealth booked in Singapore is expected to grow at a rate of 9% through to 2027,” according to BCG. That will place it in the top three wealth management hubs globally, behind Hong Kong and Switzerland.

Hong Kong’s family office community is about 400-strong, and the city has ambitious plans for growth, with targets for a further 200 by 2025.

Experts are generally bullish on Hong Kong’s prospects. Indeed, the rate of regional wealth creation is so significant that Hong Kong and Singapore are each strengthened by the success of the other.

Singapore is seeing success in attracting emerging wealth from Indonesia, Thailand, Malaysia and Vietnam, while Hong Kong will always be the dominant hub for wealth created in the Chinese mainland.

Luring Investors

Indeed, the success of Hong Kong as a wealth management hub hinges less on the performance of Singapore than it does on the expansion of the Chinese economy and its ability to attract wealthy individuals from the mainland.

China’s economic growth is likely to slow to 4.5% in 2025, down from 8.4% in 2020, according to World Bank forecasts. Those growth rates are still likely to be enough to help propel Hong Kong to becoming the world’s dominant wealth management hub by 2027, taking Switzerland’s crown, the BCG report said.