The international luxury housing market experienced explosive growth in 2013, with prime property sales reaching a high of 41 700 in the $1-million-plus market compared to 35 000 in 2012.
This is according to a newly-released report on the international prestige property market by Christie’s International Real Estate, the world’s leading luxury residential real estate network and the real estate arm of Christie’s Art House.
Now in its second year, Luxury Defined: An Insight into the Luxury Residential Property Market, presents an in-depth analysis of luxury market trends and compares 10 of the world’s top property markets: Cote d’Azur, Hong Kong, London, Los Angeles, Miami, New York, Paris, San Francisco, Sydney and Toronto.
Using Christie’s International Real Estate Index, markets were ranked across key metrics including record sales prices, prices per square foot, percentage of non-local and international purchasers, and the number of luxury listings relative to population.
London topped this year’s Index, with a $101.5-million top sale and average luxury home sale prices of $4 683 per square foot. New York and Los Angeles ranked second and third respectively, driven by exceptional growth in luxury sales volume. And despite government cooling measures impacting sales volume, Hong Kong still performed strongly, ranking fourth with an exceptional$83.3-million top sale.
Bonnie Stone Sellers, Chief Executive Officer of Christie’s International Real Estate, said that the momentum in luxury sales can be attributed to substantial wealth creation in 2013, fuelled by an improving global economy and surging stock-market prices, resulting in more millionaires and billionaires than ever before.
With more people in the world moving to and living in cities, the report noted that urbanism will continue to flourish in this decade and beyond as innovative firms cluster around expensive urban areas, attracted by the productivity and creativity that so-called agglomeration cities induce. The luxury homes markets that rebounded the strongest in 2013 are in urban centres.
Chris Tyson, CEO of Tyson Properties, a Christie’s International Real Estate affiliate, says this trend is reflected in Durban too with luxury housing estates like Zimbali Estate in Ballito showing phenomenal growth.
The Christie’s report also identified three prominent buyer groups; local buyers at the lower end of the luxury market, the younger millennial buyer – children born of Baby Boomer parents after 1980, and overseas buyers.
The millennial buyers comprise a growing segment of $1-million-plus home buyers in many of the indexed cities. These younger buyers spend a significantly larger percentage of their wealth on homes and want amenities such as open-floor plans and high-tech, fully automated home environments.
The high-net-worth overseas buyers are driven to invest in trophy homes outside their resident countries because of a desire to move equity from turbulent markets to stable, currency-favourable locations. In addition to wealth protection and currency attractiveness, many international local buyers also purchased homes abroad because of educational opportunities for their children.
Other information coming out of the report indicates that changes to tax laws did impact some prime property markets in 2013, but in general they had little impact outside of Asia and France.
The Luxury Defined report can be accessed at www.christiesrealestate.com/luxury-defined.