Asia is rapidly catching up with North America as the world’s richest region, but although global wealth increased in 2010, fears about geopolitical instability are high, according to an annual survey of attitudes by Citi Private Bank and Knight Frank, the global real estate company.

In a 66-page report unveiled today, its “wealth distribution model” shows there is a total of $13 trillion of private wealth in North America, with $11 trillion in Asia and also $11 trillion in Europe.

The wealth of North American high net worth individuals rose by 15 per cent last year as global financial markets continued to recover from the hammering sustained in 2008; Asia-Pacific HNW individual wealth boomed, up by 35 per cent. Meanwhile, European HNW individual wealth expanded by 20 per cent, while Latin American wealth increased by 25 per cent.

North American cities still dominate rankings in terms of the most desirable places to live, price and centres of influence. In the Knight Frank Global Cities Index, covering 40 cities, New York takes top spot on a composite rating for economic activity, political power, quality of life and knowledge and influence. Washington DC scores top for “quality of life”.

The US has 2,866,000 millionaires, China (mainland) has 477,000 of them, and the UK, for example, has 448,000, while there are 383,000 in France, 862,000 in Germany, 219,000 in Singapore and 222,000 in Switzerland.  

Looking to the next 10 years, New York is projected to hold its top ranking, but with its lead slipping slightly from when the same question was asked of HNW individuals about their preferred cities in 2009. The biggest gainer, at third place, is Shanghai, followed by Beijing, in fourth. Hong Kong and Singapore rank fifth and sixth respectively. On the downside, San Francisco – near the famed Silicon Valley region of the US – ranks at a lowly twentieth when people were asked about leading cities in 10 years’ time; Los Angeles also saw its ranking drop, to eighteenth. (This Attitudes Survey was drawn from 160 Citi Private Bank advisors representing almost 5,000 ultra high net worth individuals in 36 nations.)

According to latest available figures in 2010 compared with 2009, the sharpest price rise for a city out of a total of 85 cities was Shanghai, up 21 per cent, followed by Mumbai (+20 per cent), Singapore (+18 per cent), and Helsinki (+18 per cent). The fastest rising US city in terms of price was New York (+13 per cent).  A number of exclusive towns and cities in Europe, such as Lausanne, St Tropez, Cannes, Lake Como, Monaco and Zurich, showed no price rise at all.

The report said that while so much focus has been on China, it is premature to assume that other markets have been put in the shade or are not important. “North America remains centre stage, but there is wealth to be made in Brazil, Australia, the Gulf states and, boring though it may seem, old Europe,” said Stephen Wall, director of Scorpio Partnership, the consultancy, in a comment for the report.

Among other highlights, the report’s authors noted that political risk awareness has grown sharply over the past 12 months. Some 63 per cent of ultra high net worth individuals are more concerned about global political instability than a year ago, which is unsurprising, given such developments as budget fights in the US legislature, eurozone debt worries, and Middle East and North African turmoil.

“Late last year, we identified 2011 as the 'Year of Living Dangerously'. We believe increasing social and political upheaval and intensifying sovereign debt dynamics would converge, testing the strained political capital of world leaders,” Tina Fordham, Citi Private Bank’s senior political analyst, said in the same report.

The report also examined luxury property markets and favored locations for HNW individuals to buy second homes. On luxury market pricing, Monaco is the most expensive, at $65,600 per square metre, ahead of London, at $56,300 per sqm; Cap Ferrat (France), at $54,600 per sqm; St Tropez, $40,800 per sqm; and Paris, $40,500 per sqm. New York ranks seventeenth, at $22,600 per sqm.

North American HNW individuals said France was their favoured country for a second home; Latin Americans said the US was their favourite, while the European wealthy chose the UK, and East Asians chose the US.

Asked about the country they would most likely to change as their principal residence, North Americans gave the highest vote (10 per cent) to Canada, followed by Switzerland (9 per cent), then the UK (8 per cent).