The port of Fontvieille in the Principality of Monaco.
Education images | Universal Image Group | fake images
The ultra-rich are looking for a better lifestyle and a hefty investment when buying their next home, according to a new study.
A quarter of ultra-high-net-worth Americans, or those worth $30 million or more, plan to buy residential property this year, according to the Douglas Elliman and Knight Frank Wealth Report. According to the report, the average ultra-high net worth person already owns four homes. A quarter of its residential portfolio is located outside its home country.
When it comes to priorities for their next big purchase, the ultra-wealthy placed “lifestyle” and “investment” at the top of the list, followed by taxes and security.
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While luxury real estate has been hit by many of the same pressures as the rest of the market (low supply, slow sales, rising prices), the ultra-high end has fared slightly better. Last year in the US, there were 34 sales of more than $50 million, up from 45 in 2022, but still well above pre-pandemic years.
With interest rates stabilizing and possibly falling this year, real estate experts say there are early signs that luxury supply could be growing, which could lead to more sales.
“If we see a shift toward lower rates, or at least more confidence that inflation is going in the right direction, I think we'll start to see inventory build up again,” said Liam Bailey, partner and global head of research at Knight. . Frank.
The report forecasts that the best-performing US luxury market this year for price growth will be Miami, with an expected increase of 4%, according to the report. New York ranked second in the United States, with expected price growth of 2%, followed by Los Angeles with 1% growth.
Globally, the top luxury real estate market is expected to be Auckland, New Zealand, with projected price growth of 10% in 2024. Mumbai is second, at 5.5%; followed by Dubai (5%); Madrid (5%); Sydney (5%); and Stockholm (4.5%).
Elegant adobe-style houses under the imposing gaze of the nearby Burj Khalifa in Dubai.
Tyson Pablo | Loop Images | Universal Image Group | fake images
Last year, the world's top 100 luxury real estate markets recorded a solid 3% increase in average price. The best-performing luxury real estate market in the world was Manila, Philippines, with 26% growth, driven in part by investors fleeing Hong Kong and China. Dubai came in second, with price growth of 16%, followed by the Bahamas at 15% and the Algarve region of Portugal at 12%.
Among the worst performers last year were New York, with a price drop of 2%, and San Francisco, basically stable at 0.5%. The biggest drop in the world among major markets was in Oxford in the UK, with a drop of 8%.
Bailey said ultra-wealthy American buyers are increasingly venturing abroad. He said American buyers are now the main foreign buyers of ultra-prime properties in London – those priced above $10 million. They are also increasingly active in Europe.
“They've become quite a presence, much more noticeable now than before in Italy, France and Portugal,” Bailey said. “I think American buyers have become much happier to explore and think about alternatives.”
Still, a million dollars doesn't buy what it used to buy in the United States and abroad. In Monaco, the most expensive real estate market in the world, $1 million gets you 172 square feet of prime real estate, according to the Wealth Report. In Aspen, you get 215 square feet, while in Hong Kong you get 237 square feet, making New York look like a bargain at 367 square feet.
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