Prime Season for Launching New Luxury Residential Developments Around the World
Spring…the season of new beginnings. Luxury real estate markets around the world are taking off their wraps and showing their respective goods even if those developments haven’t yet firmed up their respective floor plans and prices.
The global real estate consulting firm, Knight Frank, tells us that pricing within London’s luxury market is more stable now than it has been in recent years. Average prices from 2/17-2/18 were down by only -1%, a huge contrast to price decreases of 7.9% from 8/15-2/17. Some neighborhoods, such as Marylebone, are seeing prices increasing to the tune of +3.5%.
A combination of totally brand new and renewed developments are coming to London’s luxury market. Here are just a few:
- 66 Warwick Square in Pimlico – originally built by 19thC master Thomas Cubitt, this development offers 5 units that range in price from $1.37M – $10.9M.
- Novel House in Hampstead – 17 unit project ranging in price from $1.37 – $4.9M, this development screams location, location, location
- Townhouse Collection in Maylebone – 19 units…$16M for townhouse, $5.7M for apartment; development transformed the former BBC Radio London Headquarters
- Paddington Gardens – 335 apartment homes from $1.14M – $2.8M; this is a chance to live within the largest green space in London, just north of Hyde Park
Despite gloom and doom scenarios regarding outbound migration due to high taxes and cost of living, 2018 luxury sales in San Francisco have been the highest of any previous year since 2012. Luxury condominiums comprise 51% of the City’s housing market and the price range of this market starts at +$2M. In 2018, sales of condominiums, co-ops and tenancy in common circumstances at $2M and above have jumped 55% y/y and ultra luxury homes sales have increased +19%.
New developments in San Francisco are concentrated in the southeast quadrant of the City. This means South of Market in South Beach (SoMa) to the Mission District.
The luxury market in Los Angeles is suffering from lack of inventory more than anything else. According to Zillow, the number of homes for sale in Q4 2017 dropped -22.8%. The number of active listings in Q4 2017, according to a report by Douglass Elliman Real Estate, dropped to -23.3%. Remaining inventory is down -61% to 1.2 months from a normal 6-month supply, according to Polaris Pacific.
The good news in the Los Angeles luxury market is that, according to Zillow, 38% of homes now sell above listing prices and 18% of all homes, according to CoreLogic, sell for +$1M.
Downtown Los Angeles and the Arts District are hotbeds of development with domestic, Chinese and Canadian developers in a race to capture fervent buyers. The developments in Westwood, Silverlake and West Hollywood range in price from $3M-$10M and other projects haven’t yet attached prices to their creations.
Dubai and Australia
In Dubai, infrastructure and development are ramping up for Expo 2020. Waterfront homes are key.
In Australia new developments in Sydney, Waterloo, Victoria and beyond are marked by world-class amenities and luxe interiors. Urban renewal, 10 Minute Suburbs and green urban oases are watchwords.
While 2018 is beginning at a higher note, Q4 2017 in New York had the lowest sale volume in 6 years, in large part due to the 2017 Tax Bill, according to Douglas Elliman Real Estate. In March 2018, the average sale price dipped below $2M for the first time in seven quarters. Large inventories of new developments were simply sold off and average sales prices in March 2018 were down -6.3% from last quarter and down -20% y/y in Manhattan.
Brooklyn performed the best of all five boroughs. Average prices, $946,706, were down -3.4% from the last quarter. The average price for Brooklyn luxury was $2,787,519, down -3.6% from last quarter. There was a slight increase in Brooklyn’s inventory and sales, however.
The highest notes in New York’s luxury housing market are the “starchitects” featured in new developments. The likes of David Adjaye, Robert AM Stern and Richard Meier are unveiling new buildings. Many developments are featuring IMAX theaters, personal trainers and private workspaces. Look to see prices in Manhattan ranging from $1.5M – $20M and in Brooklyn from $795,000 to $2.5M.