Living the Luxe Life: The Growing Pursuit of the Real Estate Dream
Luxury properties have always been symbols of the wealthy. From million dollar mansions to designer penthouses with the best views, to own such wealth has been the dream of most, if not all, people. The good news? According to a report by Luxury Portfolio International—a conglomerate of over 200 brokerages across the globe—the world’s population has been acquiring more wealth in the last few years. Thus, the luxury life may no longer be a mere dream, and real estate experts are expecting a spike in demand for high end properties as the world’s wealthy spends for them.
To further support this, numbers from the Credit Suisse Global Wealth Databook stated that out of the 1.6 million—and growing—households with more than $10 million in net worth, about 25% will be expecting to buy luxury real estate versus the 17% of high net worth households that would want to sell. This is a lift by 11% since 2015 and a significant jump since 2010 by over 91%.
In terms of geography, most of the world’s richest consumers live in North America where the number of high net-worth households has increased by 146% in the last seven years. Following behind is Europe where 20% of these wealthy households are. The Asia Pacific has also become a rising cradle of wealth as more individuals obtained high net worth status, especially in China where 100,000 people become millionaires each year. This boom is so strong and so rapid that the Chinese government may impose some new capital controls which may heavily hinder their ability to participate in the international real estate market.
With numbers and statistics like these, it can be hard to believe. Here in New York, the luxury market is currently dealing with slow closures and large volumes of excess inventory. It should be noted, though, that many luxury sellers are willing to negotiate their prices which do lead to slower closures. At the same time, buyers are often faced with a large variety of options available in the market. Yet, despite the long process, a huge chunk of negotiations do translate to sales. According to the Luxury Portfolio International, Manhattan luxury sales for the first half of 2017 increased by 12% versus the year before. If trends are to be believed and the market continues to remain active, then this number will be expected to reach newer heights in the near future.
Images credited to the Luxury Portfolio International Report 2017