Why the rich are WRITING OFF NYC, LONDON, and more

| May 24, 2016 | More

The international luxury housing market is thriving, but the traditional epicenters of high-end purchasing could be heading for trouble. According to a new survey from Christie’s International Real Estate, home sales over $1 million declined in many traditionally popular high-end markets over the past 12 months, while buyers with deep pockets appeared to be more interested in sinking their money in emerging luxury markets instead. In fact, although the money spent on luxury housing rose by eight percent worldwide last year, New York, Hong Kong, and London all saw declines. Instead, Auckland, Toronto, and Victoria (British Columbia) showed startling climbs in purchasing volume, with amount spent rising 63 percent, 48 percent, and 45 percent, respectively.

Christie’s CEO Dan Conn speculated that the shift likely has to do with something that nearly all homebuyers have in common at some level: the idea that their home will double as an investment. “Investors are looking for markets that remain affordable compared to primary markets and thus have more growth potential,” he explained, noting that skiers who traditionally might have purchased in Aspen might now purchase in Jackson Hole, Wyoming, the sixth-fastest growing market for home sales over $1 million.

This doesn’t mean, however, that Hong Kong, New York, and London are fading fast. In fact, they still top the lists for average price per square foot, with Hong Kong prices at an average of $3,000 per square foot! Furthermore, all luxury homes are moving off the market faster. In fact, in 2015 luxury homes sold, on average 23 percent faster than they did in 2014. Hong Kong and London are the only notable exceptions to this trend; the two cities average 95 more days on market in 2015 than they did the year prior.

Do you think that this shift in the luxury market has broader meaning for the international real estate market?

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About the Author (Author Profile)

Carole Ellis is editor in chief of the Bryan Ellis Investing Letter. Under Carole’s leadership, the Bryan Ellis Investing Letter has grown to over 700,000 subscribers, making it one of the largest real estate newsletters in the world. Each day, Carole directly impacts the daily thinking and conversations of real estate investors worldwide by providing thought-provoking analysis and commentary on news topics relevant to serious real estate investors.

Carole has a strong background in research and in the management of respected publications. She holds a degree in English Literature from the University of Georgia, and has substantial research experience in plant biology. She is the former editor of and writer for the University of Georgia’s Research Magazine. She’s also the author of hundreds of articles and multiple books and home study courses published under the names of her clients, many of whom are well known, highly respected real estate entrepreneurs as well.

Carole makes her home in Kennesaw, Georgia with her husband Bryan and 4 children.

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