More families in Qatar are becoming rich or super-rich due to well-placed investments, and the overall value of their private wealth is continuing to grow, according to a new international report.
The total number of households in the country with private wealth of $1 million or more rose by 3.7 percent during 2014 and is projected to further increase by 4.1 percent by 2019, the Boston Consulting Group (BCG) said in its latest annual report, which charts the financial health of people in 62 countries.
Overall, Qatar was found to be have the world’s third-highest density of millionaires, with 116 per 1,000 households in the country valued at $1 million or more in BCG’s report Global Wealth 2015: Winning the growth game.
Switzerland has the highest percentage of millionaires globally, at 135 per 1,000 households, while Bahrain came in second at 123 per 1,000 households.
In 2013, Qatar took the top spot internationally in terms of millionaire density, with 175 of every 1,000 households estimated to be millionaires.
The drop in rankings can at least be partly explained by Qatar’s massive and ongoing population explosion, with hundreds of thousands of expats moving here each year. Between June 2014 and June 2015, the population reached 2.37 million – a growth of more than 200,000 people (or 9 percent) on the previous year.
As most of the influx is comprised of lower-income workers, the percentage of millionaire households may appear smaller relative to the larger population.
Rich getting richer
However, according to detailed Qatar figures within BCG’s report, the number of millionaires and multi-millionaires households here is growing, while those who are already millionaires are getting richer.
Overall, private wealth in Qatar grew by 6.5 percent last year, mostly driven by more wealth being invested in equities (shares in private companies) – up 10.9 percent between 2013 and 2014.
And the report predicts that private wealth in Qatar will continue to increase, with a rise of 9.6 percent estimated by 2019.
While the total number of households becoming millionaires increased in Qatar last year, it was the super-wealthy who did particularly well.
The private wealth held by Ultra-High Net Worth households (those with $100 million or more) increased by 10 percent due to “dynamic equity markets and a growing economy”, Markus Massi, a partner and managing director at BCG Middle East said.
During 2014, 8.6 per 100,000 households in Qatar were classified as “ultra-high net worth,” and the wealth held by those is set to soar by 22.5 percent in the coming four years, Massi added.
This put Qatar fifth globally in terms of density of the ultra-rich (per 100,000 household):
- Hong Kong – 15.3/100,000
- Singapore – 14.3/100,000
- Austria – 12/100,000
- Switzerland – 9/100,000
- Qatar – 8.6/100,000
Meanwhile, the upper high net worth sector (households with wealth of $20 million-$100 million) grew 9.3 percent last year, and is predicted to continue to increase in the coming years.
This is due to more families earning enough to qualify to enter this wealth classification, while those already in it are expected to see their fortune increase as the average wealth per household is forecast to rise.
The lower high net worth bracket ($1 million-$20 million) also increased by 7.2 percent last year, and is forecast to grow by 11.6 percent over the coming five years.
Overall, private wealth in the Middle East and America rose by more than 9 percent last year to nearly $6 trillion, and is expected to increase to $9 trillion in 2019.
“Solid savings rates and continued GDP rises in oil-rich countries contributed to newly created wealth, while existing asset performance was solid despite the region’s volatile developments,” Massi added.
Globally, private wealth reached $164 trillion – up 12 percent last year. North America was the world’s richest region, with $51 trillion of private wealth. However Asia-Pacific (excluding Japan) is expected to overtake North America in 2016, when the region’s wealth is forecast to rise to $56 trillion.