France has 3 million "millionaires"
Can France really claim to be a haven for millionaires? This question arises from a report on the global distribution of wealth, published jointly by Credit Suisse and UBS. An in-depth analysis reveals that France owes its position largely to its real estate holdings.
In 2022, 3.5 million people lost their status as “dollar millionaires.” According to Anthony Shorrocks, an economist and author of the study, a significant portion of this decline in wealth in 2022 is attributable to the rise of the U.S. dollar against many other currencies. He estimates that if exchange rates had remained constant, as they were in 2021, global wealth would have increased by 3.4% and wealth per adult by 2.2% in 2022. However, he points out that this still represents the slowest growth in wealth at constant exchange rates since 2008.
Inflation also comes into play. Last year saw significant inflation, which means that being a millionaire in 2022 does not reflect the same reality as it did in 2021, explains economist Guillaume Allègre. The study shows that, when exchange rates are held constant and the impact of inflation is taken into account, real wealth has decreased by 2.6%.
Contrary to the global trend, France stands out with a slight increase in the number of millionaires, reaching 2.821 million people in 2022 (compared to 2.796 million in 2021). The country thus ranks third in the world, behind the United States (22.71 million millionaires, down 7.2% from 2021) and China (up 0.7% year-over-year, to 6.231 million millionaires). For the first time, France has surpassed Japan (2.757 million millionaires, down 18.1% from the previous year).
Although the U.S. population is nearly five times larger than that of France—which partly explains the significant gap between the two countries—the United States remains the world’s leading economic power, while France ranks seventh in terms of GDP. About 6.6% of the U.S. population is millionaires, compared to 4.1% of the French population. However, with its 126 million people, Japan could surpass France and its 68 million people. Yet only 2.1% of the Japanese population is millionaires. So what are the reasons behind France’s better performance?
The Impact of the Real Estate Market
Financial investments contributed the most to the decline in wealth, while non-financial investments (primarily real estate) held up well, despite the rapid rise in interest rates, according to Anthony Shorrocks’ analysis. He predicts, however, that this trend could reverse in 2023 if real estate prices fall in response to rising interest rates.
In France, this trend is beginning to emerge gradually. In 2022, wealthy French individuals are holding up well, mainly thanks to their non-financial assets, which account for 62.3% of their wealth—mostly real estate. Their wealth has been less affected than that of others, notes Guillaume Allègre. CAC 40 companies have not been significantly impacted by the crisis, and the real estate sector has held steady despite a slight decline in prices.
However, when considering only net worths exceeding 50 million euros, France ranks ninth globally, with 3,890 “ultra-high-net-worth individuals,” behind countries such as Germany (third) and Russia (fifth).
