The global state of wealth in 2025

March 5, 2025

The ranks of the global affluent and wealthy is growing steadily across geographies

The United States remains the undisputed leader in global wealth creation, as this report will show. Nearly 40 percent of the world’s wealthy reside in the country. No other country is as successful at creating homegrown wealth or attracting migrant UHNWIs.

Knight Frank's The Wealth Report 2025
Excerpts

The Wealth Report’s editor, Knight Frank global head of research Liam Bailey, shares his key takeaways from this year’s edition of The Wealth Report

Threats and opportunities

In each of the past 18 editions of The Wealth Report, it has been tempting to characterize the investment landscape as one of unprecedented volatility and risk.

The first two months of 2025 have continued the same narrative: the promised model of AI disruption has itself been disrupted, geopolitical power seems to be shifting more rapidly than ever, and investor allocations are moving at a record pace in reaction to the risks of bubbles forming in financial markets.

That said, although tariffs risk denting economic expansion and complicating the inflation narrative, most economists predict another year of relatively healthy global GDP growth. We might even see growth exceed that of the past two years.

Inflation has not yet been subdued in the developed world, but the consensus is that rates will gradually fall from here.

Any easing of rates will be particularly welcomed in the real estate world.

Higher debt costs and a sharp rise in fixed income returns have contributed to a near 60 percent drop in investment volumes across global property markets since the market peak in 2021. The most recent data indicate a significant slowdown in the pace of this decline, with investment volumes in the second half of last year rising year on year.

This recovery underscores one of the key findings from this year’s report – there is a huge, sustained interest in real estate investment from private capital, with 44 percent of global family offices indicating they are looking to increase allocations to the sector.

A brief appraisal of two key property markets confirms the extent of the need for this investment.

If you want to occupy a new office headquarters in central London right now, you’ll need to get in line.

Knight Frank counts 62 live requirements, each looking for upwards of 50,000 sq ft. Waits of up to three years to occupy space are common.

As a result, a growing number of occupiers are bringing forward their requirements, well ahead of lease expiry, to be assured of the right space.

For residential property, our data confirm that every G20 nation has failed to meet its annual housing target for the past five years. This has resulted in growth in both house prices and rents, stretching affordability.

The opportunity for investment in living sectors is huge and growing – the market share for build-to-rent accommodation remains 1 percent or less of all rental stock in cities such as Tokyo, Paris and Sydney.

Even with elevated global risks, for me the standout takeaway from this year’s report is the breadth of investor opportunities.

From growing luxury residential markets, through established, as well as new, commercial property opportunities, to the next big collectible sectors, the prospects for growth are compelling for those willing and able to look beyond the risks.

The big themes

THE INDISPENSABLE NATION

The U.S. remains the undisputed leader in global wealth creation.

Our Wealth Sizing Model confirms that nearly 40 percent of the world’s wealthy reside here (page 14). No other country is as successful at creating homegrown wealth or attracting migrant UHNWIs.

For luxury homes, private jets and superyachts, what happens in the U.S. shapes global markets.

THE NEXT WEALTH POWERHOUSE?

While still small in global terms, Africa is rapidly emerging as a growth hub for wealth creation, with an increasing number of individuals joining the US$10 million-plus wealth club.

Although North America and Asia remain central to global affluence, Africa’s young population, rich natural resources and improving infrastructure position it as a future leader in wealth generation (page 14).

MOBILITY IS SHAPING WEALTH DISTRIBUTION

The mobility of wealth is only set to increase. This theme is fueling supercharged growth in some housing markets, with Miami, Palm Beach and Aspen in the U.S. serving as prime examples (page 54).

The ease with which wealth can move is driving efforts to attract it and attempts to control it (page 24).

While private jets and yachts should promote mobility, we delve into some surprising limitations (page 84).

THE GREAT WEALTH TRANSFER ACCELERATES

Baby boomers still control the majority of global wealth, but the transfer to younger generations is well underway.

This year’s Next Generation Survey and the Knight Frank 150 survey of family offices both highlight future wealth and investment priorities.

Despite the U.S. administration’s pivot away from ESG (environmental, social and governance initiatives), we expect the focus on purposeful and sustainable investment will continue to grow as younger generations make their mark (page 20).

ENVIRONMENTAL CONCERNS WILL RESHAPE WEALTH

On the theme of sustainability, concerns about climate change are increasingly influencing the decisions of the wealthy, impacting everything from real estate to luxury investments.

Vineyards (page 40), yachts (page 68) and prime residential markets (page 54) are being reshaped by changing weather patterns and environmental concerns.

The future of luxury markets and commercial real estate is being defined by sustainability and climate resilience.

DEMAND FOR REAL ESTATE IS RISING

Despite a sharp fall in investment volumes from the 2021 peak, we confirm an ongoing desire for property from private capital.

While direct real estate ownership already accounts for 22.5 percent of the typical family office’s portfolio, more than four in 10 are looking to grow this allocation over the next 18 months.

Sectors in demand are led by living, logistics and luxury residential.

In addition to this desired expansion of investment portfolios, nearly a quarter of family offices that manage private residential portfolios are considering new acquisitions (page 28). These requirements are set to feed through to positive price growth in key luxury residential markets in 2025 (page 61).

BUYING POWER IS SHIFTING

Moves in market pricing and currencies have shifted the landscape of luxury property.

Our review of changes to buying power in our graphic (page 56) confirms that while London offers savings of 43 percent for dollar-based buyers compared with pricing in 2014, other markets have seen equally dramatic falls in relative buying power, with some weakening by more than 50 percent over the period.

LUXURY ON PAUSE

Our roundup of luxury collectible performance (page 70) reveals that values for a basket of 10 leading assets fell by an average of 3.3 percent in 2024.

The art market underperformed, with values down by 18.3 percent, while wine and whisky also contributed to pulling our overall luxury index into negative territory.

Despite the market correction in 2024, we note key growth prospects across the collectibles market (page 78).

NOT FORGETTING...

In our effort to provide the most comprehensive picture of wealth and investment trends, this year we have also made room to explore the techniques used by property developers to attract and retain the world’s most valuable workers and consumers, examine the rising power of online luxury sales, highlight the big collectible sales of the year, and describe what the billionaire of tomorrow will look like. All this and much more...

The risk landscape

Against a backdrop of conflict, financial turmoil and President Trump’s return to power, we assess the biggest threats facing the world economy

The world economy has had a good run.

Global GDP surpassed its pre-pandemic peak in mid-2021 and has continued to expand at around 3 percent every year since.

Will 2025 be the year that run ends? It’s possible, perhaps even likely. The U.S. has a new, volatile president, a man inviting trade wars on multiple fronts.

Inflation isn’t quite tamed. Government deficits appear out of control. Stock market valuations are inflated. War is ongoing in various theatres, and could spread to others.

“What might be deemed to be a plausible risk has expanded massively over the past five years because of the pandemic, because of the war in Ukraine, because of Trump and because of the shifts in politics,” says Neil Shearing, group chief economist at Capital Economics.

“If we’d said 10 years ago, there’ll be a global trade war, war in Europe, escalating U.S.–China tensions and seemingly genuine threats to Taiwan, all these things would have seemed implausible. That’s no longer the case.”

Understanding whether these risks will matter from an economic perspective presents another challenge.

Last year, despite regional conflict and major disruptions to Red Sea shipping lanes, oil price rises were relatively muted.

Similarly, the US S&P 500 has gained more than 20 percent for two consecutive years despite the steepest rise in interest rates since the 1980s.

Given these competing uncertainties, what are the most likely threats to growth?

A TRADE WAR

Almost two-thirds of business leaders recently surveyed by Oxford Economics believe that a trade war poses a very significant risk to the global economy over the next two years.

During his first month in office, U.S. President Trump announced 25 percent tariffs on Canada and Mexico, before granting both a month’s reprieve. The president levied another 10 percent on Chinese goods, to which China responded with its own tariffs.

The situation will remain unpredictable, hinging on factors spanning the performance of financial markets, the trajectory of the U.S. economy, the flow of illegal drugs into the U.S. and Trump’s unique approach to diplomacy.

Still, U.S. GDP will be 0.7 percent weaker this year, even if Trump reaches key exemptions with his North American counterparts, says Oxford Economics.

The outlook for Canada and Mexico will remain weak and, at the time of writing, the threat of tariffs hangs over Europe.

The crucial question for the global economy will be how other nations retaliate.

“If they respond in a much more aggressive way the whole thing escalates,” Shearing says.

STUBBORN INFLATION

Economists tend to agree that inflation is almost tamed, but a couple of percentage points can make a big difference in key sectors, particularly real estate.

“Extend and pretend” strategies – where lenders extend loan periods in the hope of avoiding having to recognize losses – hinge on rate cuts, but potential inflationary shocks lie around many corners.

Trump’s plan to cut taxes while deporting large numbers of workers could be inflationary, as could conflict in the Middle East.

Meanwhile, many governments have expansionary fiscal policies and wages continue to grow, despite slowing growth.

“None of this is going to get us back to 7 percent, 8 percent or 9 percent inflation, but it could get stuck at 3 percent or 4 percent,” Shearing says. “That’s important because I think at 2 percent or 3 percent, you can still get rate cuts next year, but if you’re at 3 percent or 4 percent, you can’t.”

FISCAL ILL-DISCIPLINE

The private sector was historically perceived as the bigger risk to financial stability, but across G7 economies government debt servicing costs are increasing – debt loads in many advanced economies stand at 100 percent of GDP or more.

The brief premiership of Liz Truss in the U.K., and its aftermath, illustrated how markets can punish governments guilty of fiscal ill-discipline – and the risks are rising.

No candidate is more vulnerable than the U.S., where national debt exceeded US$36 trillion in January, surpassing its GDP and marking an historic high.

More than half of those responding to a survey in October by the U.S. Federal Reserve survey flagged fiscal debt sustainability as a salient risk, up from 40 percent just six months ago.

“It’s entirely conceivable that we could get to the next presidential election with both sides talking about continuing to run big deficits,” says Ben May, director of global macroeconomic research at Oxford Economics. “Whether that happens or not, in the end, comes down to whether markets let them.”

THE BUBBLE BURSTS

The January release of DeepSeek, a Chinese-made AI model similar to Open AI’s ChatGPT, knocked $1 trillion off the value of AI-linked companies. Shares in chipmaker Nvidia fell 17 percent in a day, wiping $589 billion off its market value.

The Chinese model, apparently developed at a fraction of the cost of its American-made rivals, undermined two prevailing narratives that have underpinned the sector’s sky-high valuations – that a single winner is likely to take most of the spoils, and that hugely expensive hardware and infrastructure will be required to power its growth.

Nvidia and its peers quickly recovered some of their losses as bargain hunters returned, but the saga highlighted how exposed the American stock market has become to a single sector.

The largest 10 stocks in the S&P 500, many of which are AI-related, trade at a 12-month forward price-to-earnings ratio of 29x. Investors in these stocks are paying for companies’ profits for many decades into the future.

The market is in bubble territory.

Whether 2025 will be the year that bubble bursts remains uncertain.

Investors are often right about the potential of transformative technologies, but wrong about the time it can take to reach commercial success.

The dotcom boom and bust in the 1990s is a good example.

Meanwhile, a loss of faith in one industry bubble can shatter confidence in entire markets. The S&P 500 is vulnerable to a correction.

THE GREAT UNKNOWNS

There are other risks, particularly the escalation of armed conflicts, though economists perceive the chances to be too remote, or hard to predict, to produce forecasts. The same goes for pandemics and natural disasters.

A Chinese invasion of Taiwan, for example, where as much as 65 percent of the world’s chip industry resides, would present a larger risk than almost all those listed above, but the likelihood is too difficult to gauge. Investors can only hope that remains the case.

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