Tarpon Island, a private island in Palm Beach, Florida, sold for $150 million in May 2024.
CNBC
A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future releases directly to your inbox.
Sales of luxury homes rose in New York, Miami and Palm Beach, Florida in the second quarter, even as they fell in much of the rest of the world, according to a new report.
The number of homes sold for $10 million or more in the second quarter rose 44 percent in Palm Beach, 27 percent in Miami and 16 percent in New York, according to a report by real estate firm Knight Frank.
New York led the U.S. in sales over $10 million, with 72, the highest total in two years, according to the report. Miami came in second with 55, followed by Los Angeles with 42 and Palm Beach with 36. Los Angeles saw a 29 percent drop in sales over $10 million, largely due to the new “mansion tax,” which adds a 5 .5% homes sold for more than $10 million, the report said.
The biggest sale of the quarter was the $150 million deal in May for Palm Beach’s only private island, reportedly bought by Australian infrastructure investor Michael Dorrell, according to The Wall Street Journal. In June, a historic 3.2-acre Palm Beach estate was sold $148 millionwhile in Manhattan the Aman New York penthouse was sold 135 million dollars in July.
While demand in many top luxury markets is slowing from a peak in 2021, ultra-wealthy buyers continue to pay record prices for rare trophy properties, largely boosted by a rise in financial markets, Knight Frank said.
“Significant wealth creation has supported growth in the global super-high-end sales market,” said Liam Bailey, global head of research at Knight Frank. “The transformation of markets such as Dubai, Palm Beach and Miami has more than offset the slowdown experienced by some more mature markets.”
Globally, in the top 11 luxury markets tracked by Knight Frank, sales of homes over $10 million fell 4 percent from last year to $8.5 billion.
Dubai leads the world in ultra-luxury real estate, with 85 sales in the second quarter, the report said. The city experienced a stratospheric rise as the ultra-rich from Russia, China, Europe and other regions moved to Dubai for its friendly tax and regulatory regimes. In 2019, Dubai it had only 23 sales over $10 million. In the past 12 months, it had 436 sales — although sales in the most recent quarter were down slightly from last year and the first quarter, Knight Frank said.
London saw one of the biggest declines in the world, with sales of homes over $10 million falling 47% from last year amid fears of higher taxes on the UK’s wealthy, according to Knight Frank.
Although ultra-luxury buyers typically pay cash for their properties, falling interest rates around the world are expected to help support sales in the second half, according to the report.
Last week, 29 contracts were signed in Manhattan for properties priced at more than $4 million, according to the Olshan Luxury Market Exhibition — the strongest post-Labor Day week since at least 2006.
“With interest rates moving lower, overall transaction volumes are likely to increase in 2025,” Bailey said.
