The United States is the most
popular country for foreign ultra wealthy individuals looking to
buy secondary residences, followed by the United Kingdom and
Switzerland.
According to a new
report by Wealth-X and the Sothebys International Realty brand,
nearly US$3 trillion of the worlds private wealth is held in
owner-occupied residential properties, a value greater than the GDP
of India.
There are 211,275 ultra high net worth (UHNW) individuals
defined as those with US$30 million and above in net assets in the
world and 79% of them own two or more residences.
Some of the main hubs for luxury residential real estate are New
York City, London and Hong Kong, but niche locations such as
Lugano, the Hamptons outside New York City, and rural areas around
the world are gaining in popularity.
The Wealth-X and Sotheby’s International Realty Global Luxury
Residential Real Estate Report forecasts that the ongoing shift in
the wealth creation cycle from the West to the East, and the
growing significance of intergenerational wealth transfers will
have significant consequences on the luxury residential real estate
market – with a noted emphasis on new developments and a change in
investment grade cities.
Below are other key findings from the inaugural
report: The value of UHNW-owned residential real estate
assets increased by 8% globally in 2014. On average, UHNW
individuals own 2.7 owner-occupied residences. As of 2014, over 7%
of the world’s UHNW population made their wealth through real
estate, up from 5% in 2013. Ultra affluent women value real estate
assets more than their male counterparts, holding 16% of the net
worth in such assets, on average, compared to less than 10% for
men. Luxury residential real estate is an asset class typically
favored by UHNW individuals with inherited wealth: these
individuals hold 17% of their net worth in such assets, compared to
just under 9% for self-made UHNW individuals. UHNW individuals with
net worth between US$30 million and US$50 million typically keep
their primary residences for over 15 years and their secondary
residences for over 10 years. Billionaires change one of their four
properties, on average, once every three years. Secondary
residences are typically 45% more valuable than primary residences;
twice the square footage and have 10 acres of land. At 83%, Monaco
has the highest density of foreign-owned UHNW residences. Over 6%
of the world’s UHNW population have relocated their primary
residence to a different country from which they were born these
individuals often keep a secondary residence in their home
countries, and India is the leading country in this respect.
The Wealth-X and Sotheby’s International Realty Global Luxury
Residential Real Estate Report 2015, which looks at trends in the
UHNW population’s appetite for luxury residential real estate
across the world, identifies specific attitudes, behaviors and
locations that matter to this industry and this wealth segment.
We are proud to partner with Wealth-X to provide valuable
insights into todays luxury real estate market and the buying
behaviors of the ultra high net worth consumer, said Philip White,
president and chief executive officer, Sothebys International
Realty Affiliates LLC. We believe that a solid investment in real
estate is one of the single best factors for building long-term
wealth, and that many of todays ultra high net worth consumers
would agree.
This research offers an inside look into the global luxury real
estate market, said Larry Rideout, CEO of Gibson Sothebys
International Realty. Here at Gibson Sothebys International Realty
we understand the Boston, Cambridge and surrounding markets. This
study adds to that knowledge by providing valuable details on many
far-reaching markets, which helps inform our clients decisions on
where to invest on a global basis.
The Sotheby’s International Realty network currently has over
16,400 sales associates located in approximately 730 offices in 56
countries and territories worldwide. Founded in 1976 to provide
independent brokerages with a powerful marketing and referral
program for luxury listings, the Sothebys International Realty
network was designed to connect the finest independent real estate
companies to the most prestigious clientele in the world. Each
office is independently owned and operated.
To view the full report click here:The Global Luxury
Residential Real Estate Report 2015