Demand will outstrip supply in global luxury market: report

Trend points to a seller's market

TRD New York /
Sep.September 27, 2017 01:21 PM

The world’s population is getting richer, and they want to spend that wealth on luxury real estate.

The international luxury residential market will see more demand than supply over the next three years, with 25 percent of high-net-worth individuals expected to buy high-end real estate compared to the 17 percent who want to sell, according to a new report from Luxury Portfolio International, a conglomerate of more than 200 brokerages around the world.

The report also noted the numbers of wealthy people across the world is going up.

There were 1.6 million households around the world with more than $10 million in net worth during 2016, according to the Credit Suisse Global Wealth Databook. That figure is an 11 percent increase on 2015 and a whopping 91 percent increase since 2010.

Most of the world’s wealthy consumers live in North America, with the number of $10 million-plus households increasing 146 percent in the last even years. Europe is the second largest “wealth region” in the world and is home to nearly 20 percent of the world’s wealthy households.

The Asia Pacific region has seen an explosion of wealth, with the high-net-worth individuals in that part of the world increasing more than 20 percent between 2015 and 2016. China is producing 100,000 new millionaires each year, according to a report earlier this year from Knight Frank, but there is concern about that country’s new capital controls will impact investment in the U.S.

Despite the report’s rosy outlook for the international luxury market, New York City continues to experience an excess of high-end product. Luxury Portfolio’s International’s figures indicate Manhattan sales over $10 million in the first half of the year increased 12 percent from the same period the year before to hit a total of 192. However, that jump is driven largely by both closings from contracts signed in 2014 and luxury sellers’ growing willingness to negotiate on price.

In Los Angeles this year, there were 65 sales in the $10 million to $20 million range, up from from 50 during the same period of last year, according to data supplied by the brokerage Hilton & Hyland. There have been 23 sales in the over-$20 million market in the city so far this year.

In Miami, there have been 46 properties sold in the over-$10 million market so far this year, according to Keyes Realty.


Related Articles

arrow_forward_ios
Here are the week’s top luxury sales

Here are the week’s top luxury sales

Here are the week’s top luxury sales
Clockwise from left: John D. Rockefeller, Izzy Englander, Steven Mnuchin, David Koch, Jacqueline Bouvier, and William Zeckendorf (Credit: Getty Images and StreetEasy)

For 15 years, David Koch lived at the world’s “richest building”

For 15 years, David Koch lived at the world’s “richest building”
Here are the week’s top luxury sales

Here are the week’s top luxury sales

Here are the week’s top luxury sales
(Getty, iStock)

Refinancings drove up home mortgage apps last week

Refinancings drove up home mortgage apps last week
40 East 72nd Street and Spiros and Antonia Milonas  (Getty; Google Maps)

Under water: Shipping magnate’s troubled UES condo is bankrupt

Under water: Shipping magnate’s troubled UES condo is bankrupt
U.S. home prices rose with Phoenix, Seattle and San Diego logging the biggest gains (iStock)

US home prices jump 5.2% in August

US home prices jump 5.2% in August
An estimated 12.8 million Americans would owe an average of $5,400 from missed payments (iStock)

Rent debt could reach $70B by year’s end: Moody’s

Rent debt could reach $70B by year’s end: Moody’s
19 Strong Place and 161 Warren Street (Google Maps, iStock)

Brooklyn’s luxury market has best week since before the pandemic

Brooklyn’s luxury market has best week since before the pandemic
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...