UAE household wealth stood at $1.2 trillion in 2022

Total household wealth in the UAE stood at an estimated $1.2 trillion at the end of 2022, a recent report has revealed.

According to the Global Wealth Report, issued by Credit Suisse and UBS, wealth per adult in the UAE at the end of 2022 $152,556. The ratio of household debt to gross assets in 2022 was 7.8 per cent in the UAE, with little change since 2021.

Growth rates of wealth per adult in the UAE were similar in 2021 using current or smoothed exchange rates at 18.7 per cent versus 20.6 per cent, respectively. However, in 2022, measured growth differed depending on exchange rates – wealth per adult rose 11.7 per cent in the UAE in 2022 at current exchange rates, but by only 4.1 per cent using smoothed rates, the report said.

The report stressed that the UAE hosts a disproportionate number of wealthy expatriate entrepreneurs, some of whom relocated after the global financial crisis. This tred has accentuated over the past year due to global uncertainties spurred by the Russian attack on Ukraine. According to estimates, around 4,500 high networth individuals will flock to the UAE, mainly Dubai, this year to make the country their home.

Globally, the report showed that measured in current nominal US dollars, total net private wealth fell by $11.3 trillion, a drop of 2.4 per cent to $454.4 trillion at the end of 2022. Wealth per adult also declined by $3,198, a decline of 3.6 per cent to reach $84,718 per adult. Much of this decline comes from the appreciation of the US dollar against many other currencies, the report noted. Financial assets contributed most to wealth declines in 2022 while non-financial assets (mostly real estate) stayed resilient, despite rapidly rising interest rates.

Regionally, the report shows the loss of global wealth was heavily concentrated in wealthier regions such as North America and Europe, which together shed $10.9 trillion. The Asia Pacific region recorded losses of $2.1 trillion during the year. Heading the list of losses in market terms in 2022 was the United States, followed by Japan, China, Canada and Australia.

The largest wealth increases at the other end were recorded for Russia, Mexico, India and Brazil.

In terms of wealth per adult, Switzerland continues to top the list followed by the USA, Hong Kong SAR, Australia and Denmark despite sizeable reductions in mean wealth versus 2021.

Ranking markets by median wealth puts Belgium in the lead followed by Australia, Hong Kong SAR, New Zealand and Denmark.

When looked at in demographic terms, Generation X and Millennials continued to do relatively well in 2022 in the USA and Canada but were not immune to the overall wealth reduction. Broken down by race, non-Hispanic Caucasians in the USA saw their wealth decrease in 2022, while African-Americans were left almost unscathed by the downturn. In contrast, Hispanics achieved 9.5 per cent growth in 2022, owing to their greater holdings of housing assets compared to financial assets.

Reduction in wealth inequalities

Nannette Hechler-Fayd’herbe, chief investment officer for the EMEA region and global head of economics & research at Credit Suisse, said: “Wealth evolution proved resilient during the COVID-19 era and grew at a record pace during 2021. But inflation, rising interest rates and currency depreciation caused a reversal in 2022. Over the next five years, we expect global wealth will rise by 38 per cent reaching $629 trillion by 2027, with wealth per adult looking set to increase by 30 per cent to reach $110,270. We also expect the number of millionaires to grow markedly over the next five years to reach 86 million, while the number of UHNWIs will rise to 372,000.”