Strong demand for luxury property around the world has helped the sector beat the economic downturn, according to a new report.
Demand is being led by high net worth individuals (HNWIs) looking for world class lifestyle offerings who have now pushed luxury home prices to new peaks.
Those are the findings of Christie’s International Real Estate which examined 10 of the top property markets in the world: London, Paris, New York, San Francisco, Hong Kong, Los Angeles, Cote d’Azur, Dallas, Miami and Toronto.
London topped the index after racking up a record sales price for one property of £79 million last year while New York had one property sell for £57 million.
Buyers pay in cash
Every other city in the index, with the exception of Dallas and Toronto, also recorded their highest ever sales prices which broke the £23 million barrier.
The report found that HNWIs are keen to invest in properties abroad rather than buying a second home in their own country.
In addition, not only are record prices being recorded in most cities in the index but the sector is proving itself immune to the factors which affect the general housing market.
It appears too that the prices for prestigious real estate will not follow the growth trends seen in other housing markets but will instead follow the price increases being seen by luxury goods such as fine art.
The report from Christie’s also notes that most of the HNWI buyers are mainly using cash for their luxury property acquisitions.
Popular second home destinations
For example, every property worth more than £3.3 million in Los Angeles was paid for with cash.
Bonnie Stone Sellers, Christie’s chief executive officer, said poor performing financial markets has led to HNWIs recognising the potential from investing in high and real estate and fine art.
In addition, prices for luxury property are being driven by the scarcity of quality inventory in the world’s top destinations.
The most popular destination for second homes is Côte d’Azur while Toronto makes its mark for having the quickest sale times between properties going on the market and being snapped up of just 46 days.
The report also highlights 10 other places which have populations of less than 150,000 which are attracting interest in their luxury real estate.
They include St Bart’s, Aspen in Colorado, USA, the French West Indies and Salzburg, Austria.
The report notes too that the future for growth in high end real estate remains strong since there are now more billionaires in the world than there were before the 2008 financial crisis and around 55% more millionaires than in 2000.
