Hong Kong's high net worth individuals (HNWIs) grew at the fastest rate in the world for a second consecutive year, according to a research report released by Merrill Lynch on Thursday.

The growth comes amid the city's booming property market, gains made on the local stock market, and continued economic recovery, the report added.

The World Wealth Report 2011, compiled by Merrill Lynch Global Wealth Management and consulting firm Capgemini, is the 15th annual report done that traces the development of the global HNWI population and the growth of wealth.

The report said that the HNWI population in the city increased by 33.3 percent to 101,300 in 2010, surpassing the previous peak level of 96,000 seen in 2007. This marked the second year in a row where HNWLs grew at the world's fastest rate. In 2009, the city's HNWIs soared 104.4 percent, bringing the number of local millionaires to 76,000.

Under the terms used in the report, HNWIs are defined as those having investable assets of $1 million or more, excluding their primary residence and other consumer durables.

"Investors in the Hong Kong market are typically aggressive as they allocated their main bulk of capital into investing in the local property and stock market and that has helped the Hong Kong HNWI population grow strongly," said Wilson So, a managing director at Merrill Lynch Global Wealth Management.

However, So cautioned that the pace of HNWI population growth in the city will slow down because of the higher comparative base registered in the past two years. "The actual HNWI population growth depends on the performance of the property and stock markets in 2011 and the economic resiliency of the city," So said.

Regarding the local housing market, So said that property prices will remain stable as the macroeconomic backdrop and supply/demand dynamics remain favorable. The government's latest measures to tame the property market will only hit sentiment in the near term, he added.

In mid June the Hong Kong Monetary Authority ordered local banks to tighten down-payment ratios for mortgage loan borrowers for the fourth time since 2009.

The report did not say how much of their capital Hong Kong HNWIs allocate into the real estate market. However, the report provided data that showed that Asia Pacific HNWIs, excluding Japan, have allocated 31 percent of their capital into the property market, the highest proportion among HNWIs in all regions.

China Daily

(HK Edition 06/24/2011 page2)