Top global destinations lead resurgence in luxury residential property market, reports Christie’s International Real Estate in a new study on the global prestige residential market.
Entitled Luxury Defined: An Insight into the Luxury Residential Property Market, the report compares 10 of the world’s top property markets—London, New York, Hong Kong, Paris, San Francisco, Cote d’Azur, Toronto, Dallas, Los Angeles, and Miami—and debuts the ‘Christie’s International Real Estate Index,’ the first ever true global indicator for luxury residential real estate. The Index ranks markets across key metrics including record sales price, prices per square foot, percentage of non-local and international purchasers, and the number of luxury listings relative to population.
London’s $121 million (£75 million) sale and New York’s $88 million sale pushed both cities to the top of this year’s Index with the highest record home sale prices. A prized second home destination, Côte d’Azur recorded the highest percentage of both secondary home buyers (95 percent), and international and non-local buyers (90 percent). Toronto’s real estate market, which has remained buoyant in recent years of global turmoil, recorded the lowest amount of days on the market for luxury listings (46 days).
“With financial markets providing a limited return on investment, high-net-worth individuals are recognizing the intrinsic value of investing in non-consumable assets such as prestige real estate and fine art,” says Bonnie Stone Sellers, Chief Executive Officer of Christie’s International Real Estate, the world’s leading luxury real estate network and a subsidiary of Christie’s auction house. “Strong momentum in the luxury property market is also being driven by scarcity of quality inventory and demand from international buyers in many of the world’s top destinations.”
Highlights of the research include:
- Globally, top-tier property sales achieved record prices in several cities, remaining immune to many of the economic concerns that drive the general housing market.
- HNWIs are often more inclined to invest in an important global market than in another city within their home country for second or additional homes.
- Prestige residential real estate values will more likely follow growth trends of non-consumable luxury goods such as fine art more so than the growth trends of the general housing market.
- Cash transactions have dominated luxury property acquisitions across many studied cities.
- Recent tax law changesin many of these markets are expected to negatively impact 2013 market activity.