AnExplosionofGlobalWealth, FunneledIntotheRealEstateMarket

Amid unprecedented socioeconomic ups and downs on nearly every front over the past few years, global wealth has managed to hit record highs Over the course of 2021,aggregate global wealth grew by 127% to an estimated US$4636 trillion,the fastest annual growth rate ever recorded, according to the Global Wealth Report 2022 from Credit Suisse

Even when adjusted for inflation,Credit Suisse estimates real wealth to have increased by 82% in 2021,still significantly higher than the average annual growth rate of 66% The US added the most household wealth in 2021,followed by China,Canada,India,and Australia

Unsurprisingly,this explosion in personal wealth has translated to an influx of luxury buyers? and an increase in price points? in high-end property markets across the globe

This increase in the wealth of would-be buyers has,unsurprisingly,been a driver for increasing prices

One of the most dramatic stories has been unfolding in Puerto Rico?s high-end market,where an influx of wealthy buyers has combined with increasingly luxurious new developments to create eye-popping price jumps

?It?s not really an emerging market,but it is in many ways,too,and people were kind of surprised by what happened in the last two years,?says Oriana Juvelier,vice president,Puerto Rico Sotheby?s International Realty

?Before I sold a US$30 million home [in 2021],our highest sale price in the last two years had been US$6 million,and before that,it was like US$2 million?

?The numbers have increased because the types of properties that are getting built have changed and developers started catering to higher-end clients,and clients are starting to take notice,?Juvelier says ?It steamrolled from there One house is selling at US$10 million,the next at US$12 million,the next at US$20 million,setting record after record?

As wealth begins to shift into the hands of younger generations,younger investors are increasingly putting their assets into holdings such as cryptocurrencies or environmental, social,and governance investments instead of traditional stocks, according to the 2022 Bank of America Private Bank Study of Wealthy Americans

The 21- to 42-year-olds surveyed held only a quarter of their portfolios in stocks,while for investors ages 43 and above,that number was 55%

One of the few things every age demographic can agree on is the evergreen appeal of property Unlike other categories of assets,real estate investments drew nearly equal amounts of interest across all age brackets,according to Bank of America

All told,Credit Suisse notes that ?some reversal of the exceptional wealth gains of 2021is likely in 2022-23 as several countries face slower growth?But in the longer term,the picture remains positive ?We would expect global wealth to increase by US$169 trillion by 2026,a cumulative rise of 36%,?

Credit Suisse writes in its report