The harbor of the Port of Fontvieille in the Principality of Monaco.
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The ultra-wealthy are looking for a better lifestyle and strong investments when it comes to buying their next home, according to a new study.
A quarter of high-net-worth Americans, or those worth $30 million or more, plan to buy a residential property this year, according to the Douglas Elliman and Knight Frank Wealth report. According to the report, the average ultra-high-net-worth individual already owns four homes. A quarter of their housing portfolio is located outside their home country.
When it comes to priorities for their next big purchase, the ultra-rich ranked “lifestyle” and “investments” at the top of the list, followed by taxes and insurance.
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While luxury real estate has faced 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 far higher than in pre-pandemic years.
With interest rates stabilizing and possibly falling this year, real estate experts say there are early signs that the supply of luxury products may be increasing, which could lead to more sales.
“If we do see a shift towards lower interest rates or at least more confidence that inflation is going in the right direction, I think you’ll start to see inventory building again,” said Liam Bailey, partner and global head of research at Knight. Sincere.
The report predicts 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 US, with an expected price increase of 2%, followed by Los Angeles with a 1% increase.
Globally, the top luxury real estate market is expected to be Auckland, New Zealand, with a projected price increase of 10% in 2024. Mumbai ranks second, at 5.5%. It is followed by Dubai (5%). Madrid (5%); Sydney (5%); and Stockholm (4.5%).
Elegant adobe-style homes under the towering gaze of the nearby Burj Khalifa in Dubai.
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Last year, the world’s top 100 luxury real estate markets saw a steady 3% increase in average price. The world’s best-performing luxury property market was Manila, Philippines, with 26% growth, fueled in part by investors leaving Hong Kong and China. Dubai came in second, with a 16% increase in prices, followed by the Bahamas with 15% and Portugal’s Algarve region with 12%.
Among the worst performers last year were New York, with prices falling 2%, and San Francisco, basically flat at 0.5%. The world’s biggest faller among key markets was Oxford, UK, down 8%.
Bailey said ultra-wealthy American shoppers are increasingly traveling abroad. He said American buyers are now the top foreign buyers of ultra-high-end properties in London – those priced above $10 million. They are also increasingly active in Europe.
“They’ve become quite a presence, more noticeable now in Italy, France and Portugal in particular than they were,” Bailey said. “I think American shoppers have become much happier to explore and think about alternatives.”
However, $1 million doesn’t buy what it used to in the US 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, 237 square feet, which makes New York look like a bargain at 367 square feet.
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