- The world's super rich now own more than $3 trillion in owner-occupied residential property according to consultancy Wealth-X and Sotheby's
- Of the 211,000 ultra-high net worth individuals, 80% own two or more homes for personal use
- New York, London and Hong Kong lead the top ten cities that the super rich buy in, followed by Los Angeles and San Francisco
- The US, UK and Switzerland are the top three countries for ultra wealthy home buyers
The
world's super rich now own more than $3 trillion worth of owner-occupied
residential property according to a new report released by private
wealth consultancy
The
figure is significantly more than the GDP of either France or the UK,
and double that of India, and relates to homes that were bought for
their personal use, rather than property purchased as a pure investment.
The total value of these homes grew 8% in 2014.
There
are 211,275 ultra-high net worth individuals, those with $30 million or
more in assets — around the world. Luxury residential real estate was
considered as property worth more than $1 million.
Developments such as 432 Park Avenue
under construction in New York City (pictured) are aimed specifically at
ultra high net worth individuals. New York already has the highest
number of homes owned by the super rich
| Rank | City | Origin of buyers |
|---|---|---|
| 1 | New York | UK |
| 2 | London | India |
| 3 | Hong Kong | China |
| 4 | Los Angeles | UK |
| 5 | San Francisco | UK, India, Australia |
| 6 | Washington, DC | Domestic |
| 7 | Singapore | India, Indonesia, China |
| 8 | Dallas | Domestic |
| 9 | Mumbai | Domestic |
| 10 | Paris | China |
| Source: Wealth-X, Sotheby's International Realty | ||
Fueling
this boom is the 'ongoing shift in the wealth creation cycle' from the
West to the East, the growing importance of 'intergenerational wealth
transfers' the report stated.
Those
individuals with inherited wealth hold 17% of their net worth in
residential real estate, while those that created their wealth hold a
little under 9% in the asset class.
There
has also been an increase in the number of new developments
specifically targeting the super rich across the world as developers
have realized that many of these ultra-high net worth individuals are
looking for homes outside of their country of origin.
Adding
to demand for luxury real estate is the recent collapse in oil prices,
fears of punitive taxes, worries about the confiscation of assets, and
new sanctions against countries such as Russia. Real estate in world
cities is still considered a safe investment.
The
main hubs for luxury residential real estate are New York City, London
and Hong Kong, but niche locations – such as Lugano, the Hamptons, and
other rural areas around the world – are gaining in popularity according
to the report.
The
report also found that 79% of the world’s super rich own two or more
properties and just over half of them own three or more residences.
London continues to attract buyers
from all over the world, the largest number come from India. One Hyde
Park in Knightsbridge is home to London's most expensive apartment
Demand in Mumbai for wealthy
residences mostly comes from elsewhere in India, though increasingly
Indian expatriates are investing. Pictured is the 27-story home of
Mukesh Ambani, chairman of Reliance Industries
They
are also are increasing the number of properties they hold outside
their home countries with the U.S., U.K. and Switzerland being the three
favorite locations for foreign buyers.
New
York is the city with the highest number of residences owned by the
super rich in the world, followed by London, Hong Kong, Los Angeles and
San Francisco.
Rounding out the top ten are Washington, D.C., Singapore, Dallas, Mumbai and Paris.
While
a townhouse or gated mansion has always been a popular investment,
tastes are changing and demand for high-rise luxury living is seeing
skylines across the world changed dramatically - most notably in
Manhattan where supertall, but skinny, towers are rising along 57th
Street.
The
mix of foreign buyers varies, with UK buyers are the most prevalent in
New York, Los Angeles and San Francisco, along with buyers from India
and Australia.
The
Indian super rich also flock to London and Singapore, which also
attracts home buyers from Indonesia and China. Chinese buyers also favor
Hong Kong and Paris. In Washington, Dallas and Mumbai the demand is
predominantly domestic.
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