The Port of Fontvieille Harbor in the Principality of Monaco.
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The ultrawealthy are looking for a greater lifestyle and powerful investment in terms of buying their next home, based on a latest study.
One-quarter of American ultra-high-net individuals, or those price $30 million or more, plan to purchase a residential property this yr, based on the Douglas Elliman and Knight Frank Wealth Report. The average ultra-high-net-worth individual already owns 4 homes, based on the report. One-quarter of their residential portfolio is outside their home country.
In terms of priorities for their next big purchase, the ultrawealthy ranked “lifestyle” and “investment” at the top of the list, followed by taxes and safety.
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While luxury real estate has been buffeted by lots of the same pressures as the remainder of the market — low supply, slow sales, rising prices — the ultra-high-end has fared barely higher. Last yr in the U.S., there have been 34 sales over $50 million, down from 45 in 2022 but still way up from the pre-pandemic years.
With rates of interest stabilizing and possibly falling this yr, real estate experts say there are early signs that luxury supply could also be growing, which could lead on to more sales.
“If we do see a pivot to lower rates, or at the very least more confidence that inflation goes in the right direction, I believe you’ll begin to see inventory increase again,” said Liam Bailey, partner and global head of research at Knight Frank.
The report forecasts that the best-performing U.S. luxury market this yr for price growth shall be Miami, with an expected increase of 4%, based on the report. Recent York ranked second in the U.S., with expected price growth of two%, followed by Los Angeles with 1% growth.
Globally, the top market for luxury real estate is predicted to be Auckland, Recent Zealand, with projected price growth of 10% in 2024. Mumbai ranks second, at 5.5%; followed by Dubai (5%); Madrid (5%); Sydney (5%); and Stockholm (4.5%).
Cars drive along a street in front of high-rise buildings in Dubai, on February 18, 2023. Dubai saw record real estate transactions in 2022, largely attributable to an influx of rich investors, especially from Russia.
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Last yr, the world’s top 100 luxury real estate markets posted a solid 3% gain on average price. The best-performing luxury real estate market in the world was Manila, Philippines, with 26% growth, fueled in part by investors fleeing Hong Kong and China. Dubai got here in second place, at 16% price growth, followed by the Bahamas at 15% and the Algarve region in Portugal at 12%.
Amongst the worst performers last yr were Recent York, with prices down 2%, and San Francisco, mainly flat at 0.5%. The biggest decline in the world amongst prime markets was Oxford, in the U.K., down 8%.
Bailey said ultrawealthy American buyers are increasingly venturing overseas. He said U.S. buyers are actually the leading foreign purchasers of ultraprime London properties — those priced above $10 million. Also they are increasingly lively in Europe.
“They’ve change into quite an enormous presence, so rather more noticeable now in Italy, France and Portugal particularly than they were,” Bailey said. “I believe the American buyers have change into much happier to explore and sort of take into consideration alternatives.”
Still, $1 million doesn’t buy what it used to in the U.S. and abroad. In Monaco, the world’s costliest real estate market, $1 million gets you 172 square feet of prime real estate, based on the Wealth Report. In Aspen, you get 215 square feet, while in Hong Kong, you get 237 square feet, which makes Recent York seem like a bargain with 367 square feet.
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