Opening letter from the CEO of Christie’s International Real Estate:
Prime residential real estate continues to be immensely attractive for the world’s wealthiest individuals. Despite stock market volatility, geopolitical instability, and new regulations, luxury property markets overall still have a strong future outlook. As we look back on the winding road that the prime residential real estate market has traveled since the beginning of 2015 and into the first four months of 2016, several key themes have emerged:
– While there was a slowdown in growth in some significant luxury markets throughout the world like New York and London, other markets (the “underdogs”) such as Dublin and Detroit performed extremely well.
– Several cities that have seen an explosion in affluent migration, new industry wealth creation, and an uptick in their general economy, particularly those that remain “affordable” compared to nearby prime markets, are experiencing incredible growth in both million-dollar-plus home sales and prices generally.
– Emerging buyers are increasingly influencing the prime property market and will continue to evolve the marketplace in the future. These up-and-coming buyers include “millenipreneurs” (affluent millennial entrepreneurs) and high-income workers from the burgeoning tech sector. Growth in traditional industries like automobiles has also spurred a resurgence in some of these “comeback” markets.
– Exchange rates, coupled with other financial and political concerns, are impacting the ebb and flow of the international luxury market, creating opportunities for some buyers and challenges for others.
– Despite attempts by governments to reshape top global markets and deter ultra-prime property buyers in cities such as Hong Kong and Singapore, many of the world’s most affluent individuals continue to turn to property as a stable asset class.
– Increased attention on the transparency of prime property markets may dissuade some legitimate buyers, but will not in the long term deter buyers as they continue to appreciate the lifestyle and financial benefits of luxury home ownership.
– Globally, well priced trophy homes continued to command strong prices in the world’s top cities. Several markets surpassed all-time local record prices in 2015 and to date in 2016. However, the new luxury landscape has presented challenges at the highest levels as a widening disparity is evident between what buyers and sellers consider fair market value for prestige properties.
Dan Conn, CEO (Christie’s International Real Estate)