luxury real estate

How luxury real estate agents can connect with the top 1%

Regardless of global circumstances, rich consumers pursue luxury
  • The UHNWI category is much bigger now than five years ago.
  • Ultra-wealthy individuals will continue to be active in the luxury real estate market.
  • The definition of luxury changes over time.

Luxury real estate always has its admirers and those willing to invest in the market.

This upscale sector is consistently popular with the UHNWI (ultra high-net-worth individual) category, including the globe’s wealthiest people. This group controls a significant amount of the world’s riches.

Controlling luxury 

The UHNWI is defined as a person with investable assets of at least $30 million, excluding personal assets and property (such as a primary residence, collectibles and consumer durables).

Despite political uncertainty around the world, the globe’s super-rich still purchase luxury real estate. Partnering with the YouGov Affluent Perspective, Luxury Portfolio International, the luxury division of Leading Real Estate Companies of the World, completed a recent survey of the wealthiest consumers in 12 countries.

Confidence in luxury

The results show that the wealthiest consumers continue to be optimistic about the luxury real estate market and intend to purchase property in the upscale sector.

YouGov found that 25 percent of the U.S. wealthy planned to buy high-end real estate over the next three years; 18 percent were looking to sell luxury real estate within that same period.

Outside the United States, there seemed to be even more confidence in the upscale marketplace; 45 percent of the international wealthy wanted to buy luxury real estate, and 23 percent were interested in selling first-class residences.

Deciding on luxury

The YouGov report concluded that almost one in four of the world’s wealthiest — the top 1 percent — plan to make a real estate purchase within the next three years. In addition, nearly as many homeowners plan to sell luxury property.

The globe’s richest still demand high-end real estate though, of course, that demand can vary according to location.

As recent as September 2016, Philip White, president and CEO of Sotheby’s International Realty Affiliates, told CNBC that high-end real estate was faring better in some areas compared to others.

Accommodating luxury

Neighborhoods have to be conducive to the buyers’ luxurious lifestyle. They want the elements of luxury in close proximity to their residence. As well, the area infrastructure has to suit their needs.

Also, the ultra-wealthy group has grown — especially in the category of a net worth of $50,000 or more. According to Credit Suisse data, their numbers have increased by 123,000 (a 53 percent rise) during the past five years.

The majority of these new ultra-wealthy individuals live in North America where the super-rich sector is growing faster than in Europe.

Indeed, North America’s super-rich double that of a similar group in Asia. Yet U.S. real estate can still expect capital to flow in from Asia, England and other parts of Europe.

Modern standard of luxury

No doubt today’s UHNWI is extremely interested in high-end property. Luxury real estate agents must remember, however, that the modern ultra-wealthy consumer has the highest standards as well as considerable knowledge about world-class goods and services.

They prefer private, exclusive areas and ultra-luxurious homes. Indeed, the contemporary UHNI has a new standard of luxury, and their real estate agents must be able to provide them with a property of exceptional caliber.

Connecting with luxury

Luxury real estate agents must reach out to the UHNWI, explore present high-end trends and understand their motivation to buy upscale property. Seek out local, national and international leads.

Keep in mind that a new generation of UHNWI investors from emerging countries want to buy luxury real estate in Western markets.

Note that the younger wealthy — either home or abroad — do not have the same traditional motivations as their parents. To develop successful agent-client relationships with this group, today’s luxury real estate agents must educate themselves about the new affluent buyer.

A top-performing luxury real estate agent knows which type of high-end property (elegant estate, opulent condominium, brand-new development, etc.) would best suit a specific client. A knowledgeable agent can easily find the perfect neighborhood for each individual buyer as well.

Luxury real estate agents should be able to work effectively with a diverse affluent clientele; not all the wealthy demand the same type of high-end property.

The UHNWI, however, is interested in diversifying their holdings. This global luxury real estate sector gets much of its strength from the UHNWI.

The successful luxury real estate agent works to achieve the strongest possible connection to this world of luxury.

Kevin M. Leonard is the founder of Luxury Agent and Valore Group. You can follow him on Twitter or LinkedIn.

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