Port of Fontvieille, Principality of Monaco.
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Ultra-high-net-worth individuals are seeking better lifestyles and stronger investments when it comes to purchasing their next home, according to new research.
A quarter of America's ultra-high-net-worth individuals, or individuals with assets of $30 million or more, plan to buy residential real estate this year, according to Douglas Elliman and Knight Frank's Wealth Report. The average ultra-high-net-worth individual already owns four homes, according to the report. His quarter of their housing portfolio is outside his home country.
When it comes to prioritizing their next big purchase, the ultra-wealthy ranked lifestyle and investments at the top of their list, followed by taxes and safety.
While luxury real estate is under many of the same pressures as other markets, including lack of supply, weak sales, and rising prices, ultra-luxury real estate is faring slightly better. Last year, there were 34 sales over $50 million in the U.S., down from 45 in 2022, but still a significant increase from pre-pandemic levels.
With interest rates likely to stabilize and fall this year, real estate experts say there are early signs that the supply of luxury goods may increase, which could lead to increased sales. ing.
“Once we see a shift towards lower interest rates, or at least more confidence that inflation is heading in the right direction, inventories will start to build up again,” said Liam Bailey, partner and global head of research at Knight & Co. Deaf,” he said. Frank.
Miami will be the fastest-growing luxury market in the U.S. this year, with prices expected to rise 4%, according to the report. New York ranks second in the US with an expected price increase of 2%, followed by Los Angeles with a 1% increase.
Globally, the top market for luxury real estate is Auckland, New Zealand, with prices expected to rise by 10% in 2024. In Mumbai he is 5.5% and he is second. This is followed by Dubai (5%). Madrid (5%); Sydney (5%); Stockholm (4.5%).
Cars drive down the street in front of a skyscraper in Dubai on February 18, 2023. Dubai saw record real estate transactions in 2022, largely due to an influx of wealthy investors from Russia.
Karim Sahib | AFP | Getty Images
Last year, the world's top 100 luxury real estate markets recorded a solid 3% increase in average prices. The world's strongest luxury real estate market is Manila, Philippines, which grew 26%, thanks in part to investors fleeing Hong Kong and China. Dubai came in second with a 16% price increase, followed by the Bahamas at 15% and Portugal's Algarve region at 12%.
Last year's worst performers were New York, where prices fell by 2%, and San Francisco, which was nearly flat at 0.5%. The worst-performing prime market in the world was Britain's Oxford, which fell 8%.
Bailey said ultra-wealthy buyers from the United States are increasingly moving abroad. He said the main foreign buyers of London's ultra-luxury real estate priced above $10 million are now American buyers. They are also becoming increasingly active in Europe.
“They've become a huge presence, especially in Italy, France and Portugal, where they're getting a lot more attention than they used to,” Bailey said. “I think American buyers are more willing to look for and think about alternatives.”
Still, $1 million doesn't buy it in the U.S. or abroad the way it used to. In Monaco, the world's most expensive real estate market, $1 million can buy you 172 square feet of prime real estate, according to Wealth Report. In Aspen he has 215 square feet, while in Hong Kong he has 237 square feet, so his 367 square feet in New York looks like a bargain.
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