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Dollar Millionaire Households in China Number Two Million: Could Mean US$360 Billion into Global Housing Markets

There were 2,378,000 US dollar millionaire households in mainland China in 2013 – an increase of 82% from the previous year – according to the Boston Consulting Group’s Riding a Wave of Growth: Global Wealth 2014. Japan had just over half the number of millionaire households, with 1,240,000, while in 2013 the United States had 7,135,000 millionaire households. With 329,000 millionaire households, 4.2% of Taiwanese households were millionaire households; with 238,000 millionaire households, 9.6% of Hong Kong’s households were millionaire households.

Luxury items, collectibles, and real estate were not included in wealth calculations, which defined a millionaire household as one holding US$1 million in total liquid investments. Chinese private financial wealth grew by 49.2% between 2012 and 2013, in no small part due to the growth of specialized financial products – 2013 had an 81.5% increase in wealth in trusts – and even in a market where Chinese wealth in equities fell by 6.8%. Asia-Pacific (sans Japanese) wealth increased by 30.5% to US$37 trillion, while global wealth increased 14.6% to US$152.0 trillion.

According to Forbes, this large number of Chinese millionaires, combined with an upgrade in China’s qualified domestic institutional investor (QDII) scheme, means that the world’s housing markets could see US$360 billion coming from millionaire Chinese investors over the next five years. Upcoming changes to the QDII scheme mean that investment firms are no longer the main actor under QDII; rather, rich, individual Chinese investors will be able to participate. These participating Chinese individuals must have a net worth of at least US$160,000; as reported by Forbes, if 2,378,000 millionaires participated and invested in real estate, markets would see approximately US$360 billion over the next half decade, or an annual flow of US$71.3 billion.

More difficult to calculate is the amount and personal holdings of Chinese millionaires who might wish to invest in foreign real estate, how much of this foreign investment in real estate would be linked to migration, and how much would be driven only by financial considerations.

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