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Luxury market on an upswing in US
More homes than ever before were sold and listed at US $100 mn or higher in 2014
May 5, 2015: ‘Trophy’ has become the new buzz-word in luxury real estate. According to a just-released study by Christie’s International Real Estate— the world’s leading luxury residential network and the real estate arm of Christie’s art house — more properties than ever before were both sold and listed for sale at US$100 million or higher in 2014. As the number of billionaires globally reached new heights, so too did the price benchmarks for their trophy homes, as the world’s most affluent focused more and more on acquiring “collectable”residential assets in prized locations across the globe. US$100 million is now firmly established as the billionaire benchmark for ultra-prime property.
At the more traditional luxury residential real estate price segments, the overall market experienced steady growth in 2014, with US$1 million plus home sales up by an average of 16 percent over 2013 in the 80 luxury residential markets surveyed for the report. Titled Luxury Defined, the third annual edition of the research paper not only examines the world’s top 10 cities for prime property, but also analyzes an additional 70 key regional markets, exploring the dynamics and drivers shaping the globe’s high-end real estate market. Key findings from the white paper revealed that second home resort markets were red hot in 2014, leading the growth in luxury property sales.
Other from Luxury Defined include:
- 2014 welcomed a return to normality in most major cities with growth showing signs of stabilizing in locations such as Paris and New York.
- Toronto ranked as the world’s ‘hottest’ luxury market, and was the only location to see a faster year-on-year pace with a 37 percent increase in luxury home sales.
- As millennials grow up and baby boomers transition into life as empty nesters, these buyers are increasingly seeking urban amenities. This helped fuel growth in high-value urban market sales, particularly in metropolitan cities, which jumped by 15 percent over 2013.
- Second home markets led the growth of high-value sales in 2014, with 'Jet set destinations’ recording on average a 28 percent year on year increase, fueled by attractive investment opportunities, below market-peak prices, and a confidence that the market has bottomed and a recovery is well under way.
- International second home buyers are driving market growth, particularly in Marrakech and Turks & Caicos where 100 percent of top end purchasers are from overseas.
- Dubai ranks as the most popular city for second home purchases amongst global HNWIs, who accounted for 75 percent of sales. Meanwhile, 44 percent of the sales in London and 40 percent in Miami were international second home purchases.
- The highest price-per-square-foot achieved in 2014 for a luxury home was recorded in Cote d’Azur at US$22,577 per-square-foot.
- The average starting price for a ‘luxury home’ worldwide is US$2 million. London and Beverly Hills have the highest price entry points at US$6 million and US$8 million, respectively.
“More than ever before, we are focusing on the purchasing patterns of ultra-affluent individuals – as well as what’s driving their investments across the globe -- and why the acquisition of luxury real estate has become increasingly important to their portfolios,” said Dan Conn, CEO, Christie’s International Real Estate. “Whether for safe storage of wealth, lifestyle upgrades or the pure passion of the investment, the intrinsic recognition of the sheer value of prime property ownership could not be stronger among these consumers.”
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