#4, NEW YORK CITY: 3,008 RESIDENT UHNWIS

Overview *

According to Knight Frank, growth in the US means it is “becoming a bigger target for safehaven wealth flows from Europe, the Middle East and Africa.” So much so that, by 2025, New York City is expected to overtake London at the top of this list of UHNWIs by population.

What Are They Spending On?

While luxury property worldwide increased in price by 2% in the last year, in New York City that figure was 18.8%. In the Santiago Calatrava tower in Lower Manhattan, every apartment is on the market for over $35 million; five years ago, not a single apartment in the city went for that amount. The city is also a world leader in money management: 20% of the $1 trillion invested in hedge funds worldwide is invested in New York City. Philanthropy is a major trend among the city’s super-rich. 10% of US’ 63,000 charitable foundations are based in the city. Even in the midst of a recession, the Museum of Modern Art was able to raise $858 million in donations for its new building. “There are so many wealthy people here that being rich isn’t a distinguishing characteristic; you have to be intelligent and socially useful,” says Mitchell Moss, an urban policy and planning professor. But New York City’s UHNWIs also like to spend on themselves. Due to low taxes, they have more disposable income than many of their counterparts who live in other cities on this list. New York City residents spent more than $25.5 billion on personal luxury goods last year, more than the whole of Japan, the second-biggest market.

What’s Next?

Retail accounts for more of the US economy than in almost any other industrialized country. But analysis of “Black Friday” and “Cyber Monday” spending over recent years by LPL Research suggests that retail spending at holiday times is in decline, with consumers starting to spend money on experiences, gifting spa treatments, concert hall tickets or expensive meals. This trend fits with the global decline in predictable “seasons” for retail spending and the emergence of year-round, borderless luxury services spending.