- The luxury real estate sector saw expanded growth during the past year.
- A few high-end real estate developments surprised the industry in 2016.
- Buyers and sellers will determine the future look of luxury real estate.
As we move into autumn and head toward the last quarter of the year, let’s look back at the state of global luxury real estate in 2016. What defined high-end property in recent months? Can we take away valuable insight from observing the performance of luxury real estate this past year?
Luxury real estate 2016: The fact of the matter
One thing is certain in the luxury sector. Despite fluctuating stock markets, exchange rates, regulatory issues and financial and political concerns as well as instability within some global regions, UHNW (ultra high net worth) individuals continue to be active in the luxury real estate market.
Of course, not all regions performed the same. Oddly, a few major centers (such as New York and London) did not see the same growth in luxury real estate during 2015 and early 2016 as in previous years. Yet other areas (including diverse regions such as Dublin and Detroit) showed surprising improvement.
The expansion of the high-end real estate market is an overall promising sign for the industry. Even if certain international governments try to deter ultra-prime property buyers, they still cling to — and act on — the dream of owning luxury real estate. Obviously, investors can be prepared for short-term challenges, but they are willing to meet them with a long-term goal in mind.
Luxury real estate home and abroad
The international luxury market is a complicated but evolving sector. There are countless factors at play in the current international marketplace such as global influences and buyers who have ever-changing financial goals, diverse lifestyles and different preferences in property than investors from a few years ago.
The investment opportunity and opulent lifestyle that accompanies luxury homeownership encourages foreign buyers as well as U.S. purchasers. When cities are home to new industries and a general upbeat economy, they always attract interest from affluent buyers.
The value of luxury
Quite frankly, a good price appeals to all buyers — even the UNHW group. Everyone likes to believe that they are getting a good deal. When you are investing a million plus or multi-millions into a property, then value for money is a deal-breaker.
Obviously, trophy homes sell for very high prices — especially in the world’s major centers. During the past year, several local markets have even seen record prices. There have been “comeback” markets in different areas worldwide.
Some areas have even reached their strongest point ever since the period of global financial upset. Buyers and sellers, however, will ultimately determine the market, and they are looking for a fair market value for luxury properties.
The future of luxury real estate
Luxury Defined 2016: An Overview, an insight by Christie’s International Real Estate into the recent upscale residential property market, states that certain wealthy groups including “millenipreneurs” (affluent millennial entrepreneurs) and high-income workers from the growing tech industry will continue to impact the high-end real estate market.
There will always be revolving factors that influence housing prices, inventory and sales. We can safely predict, though, that the world’s wealthiest will still invest in the luxury real estate market.
Kevin M. Leonard is the founder of Luxury Agent and Valore Group. You can follow him on Twitteror LinkedIn.