Tuesday, September 13, 2016

The Global Luxury Real Estate Report

The term “luxury” can mean different things when you’re talking about high-end housing, and then creates fascinating universal trends and micro markets alike when it comes to the global real estate market. By surveying luxury home prices and home sale data for more than 100 cities around the world, we come up with these interesting conclusions:

But first let’s consider the question, “Who is buying luxury homes around the world?” While the wealthiest people in the world may be incredibly diverse, we do know that there are about 1,810 individuals with at least a billion dollar net worth in the world, an all-time high.

A snapshot of luxury home price appreciation:
We saw significant price increases for luxury homes in many of the world’s top cities, despite increased regulations, taxes, economic shifts, and geo-political concerns.

Luxury housing markets globally increased by 8% in 2015, after a prolific 16% increase in 2014.

Primary home markets increased by 9% in 2015, compared to 7% in 2014.

Meanwhile, values for second homes and resort properties increased by 10% in 2015, after a seismic 24% increase in 2014.

The average price for a luxury property worldwide is $2.2 million.

Here are some of the most expensive cities for luxury real estate in the world:

London
Average luxury home price: $7 million
Average home price: $2.3 million
2nd highest luxury sale in the world in 2015 ($141 million).
London also has more luxury listings than any other city in the world.

Monaco
Average luxury home price: $10 million
2105 top sale: $66.6 million

Sydney
Average luxury home price: $8 million
2015 top sale: $52.6 million
Homes selling for a million dollars or more were up by 15 percent in Sydney in 2015.

Hong Kong
Average luxury home price: $5 million
2015 highest price/square inch: $19,563
Hong Kong was the second most expensive city in the world for luxury real estate in 2015, and also had the world’s top residential sale in 2015 ($194 million).

Miami
Miami actually saw a dip in real estate selling for a million dollars or more, most likely because of new US government regulations that mandate full disclosure for foreign buyers. But Miami did see a local record sale of $55 million for a new luxury penthouse in the city.

Auckland
New Zealand’s capital city is the hottest new destination for luxury real estate, with a booming 63% increase in million dollar sales in 2015.

Toronto
The Canadian jewel city was a fast-riser on the luxury scene with 48% growth in year-on-year luxury home sales volume in 2015.

San Francisco
San Francisco saw a Gold Rush-like boom in luxury home sales in 2013 and 2014 with 62% and 19%, respectively, before coming back to earth with a solid 12% increase in 2015.

Paris
Marking the first increase in luxury sales in three years, high-end home sales in Paris jumped 20% in 2015, much of it from American and Middle Eastern buyers, which may recede in 2016 and beyond.

New York
Manhattan experienced a housing shortage over the last few years, exerting upward pressure on already sky-high home prices. But with a release of thousands of new luxury condos and units, sales of $10 million-plus residences slowed by 14% in 2015.

Year-on-year growth in the number of million dollar home sales:

Toronto + 47%
Paris +21%
Sydney +15%
San Francisco +12%
Los Angeles +4%
Miami +0%
London -4%
New York -6%
Singapore -12%
Hong Kong -13%
Dubai – 26%

Please note that this doesn’t represent gains and losses in home values, but the number of million dollar home sales compared to 2014. Therefore, market, economic and geo-political factors play a role. For instance, fears over Brexit volatility, shifting populations, new property tax codes, and US regulations over foreign cash buyer disclosure have altered the demand for luxury homes.


Some of the highest home prices per square foot:

1.     Monaco +$4,000/ square foot
2.     Hong Kong +$3,000/ square foot
3.     London $2,000/ square foot
4.     New York $1,950/ square foot
5.     Los Angeles $1,100/ square foot
6.     Singapore $1,080/ square foot
7.     Paris $1,000/ square foot
8.     Zurich $990/ square foot
9.     Naples $975/ square foot
10. San Francisco $970/ square foot

Record luxury home prices:

In 2015 we saw record high home sales prices in 4 of the world’s top 10 luxury markets.

$194 million Hong Kong
$141 million London
$92 million   New York
$67 million   Singapore
$60 million   Los Angeles
$55 million    Miami
$53 million   Sydney
$39 million   San Francisco
$32 million   Paris
$23 million   Toronto

Asking price versus selling price for luxury real estate:
The top end of real estate sales in world markets sold for an average 19% less than their original asking or listing price.

-That’s a significant decrease in final sale price from the 14% list-v-sale price luxury homes saw in 2014.

However, homes in the low luxury class of real estate, defined by $1-3 million dollar listings, sold for only 6% less than original asking price, representing both more realistic and accurate seller pricing and higher buyer demand.

Length of time to sell a luxury home:
Luxury homes around the world took an average of 195 days to sell in 2015, a sharp decrease of 23% from 2014. In fact, despite many luxury home markets softening in 2015, we also saw new supply constraints and steady demand drop the Days on Market for many $1 million+ luxury home listings.

In San Francisco, for instance, the average DOM for luxury listings was only 61, compared to 130 DOM in 2011.

Sydney 67 DOM
105 DOM in 2011

New York 79 DOM
111 DOM in 2011

Miami 125 DOM
172 DOM in 2011

Toronto 28 DOM
50 DOM in 2011

Los Angeles 67 DOM
137 DOM in 2011

But that wasn’t the case for all luxury markets, including:

Paris 165 DOM
140 DOM in 2011

Hong Kong 250 DOM
105 DOM in 2011

London 270 DOM

120 DOM in 2011

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