Knight Frank, one of the world’s largest global property consultancies, found that even as the housing market sinks for the “just” wealthy, markets for the super-rich are still doing more than fine.
Knight Frank zeroed in onjust 17 geographic sales areas, areas in which at least three +$25M transactions closed in the last 12 months. Half of these +$25M closings took place in cities around the world. The remaining half were split among skichalets in Gstaad, St. Moritz, Courceval and Aspen and vacation homes inMalibu, Palm Springs, the Caribbean, Monaco and the South of France.
Liam Bailey, global head of research for Knight Frank, said, “There is a lot of people making a lot of money and they’re willing to pay significantly more to access the right product.” Combined transaction levels in New York, London and Hong Kong increased by 12% over the last two years and that growth is “set to continue” with more inventory coming onto the market.
Hong Kong, the most expensive of all global markets, had the highest number of +$25M transactions during thelast 12 months. Forty-seven propertiessold for a combined $2.5B with an average of $52.8M/house.
The very top end of the ultra prime New York market increased by +50% between 2015–2017. In the last 12 months, there were 39 documented sales above $25M for a combined total of $1.5B.
London, the once top ranking ultra prime real estate market in the world, notably deflated this year due to ongoing uncertainties surrounding the Brexit and how to deal with it plus much higher stamp duty charges. In 2015, +$2.8B changed hands; in 2017, $1.5B changed hands, a 46% decline.
Los Angeles is becoming a shining light on this stage of global ultra prime real estate. The City of the Angels had just five transactions above $25M in 2015. That number tripled to sixteen transactions in 2016. Eighteen +$25M transactions closed in 2017 and, in the months through October of 2018, twelve transactions have closed with an average sales price of $38.4M.
Bailey summed up the ultraprime housing market by saying, “I don’t think it (the blooming ultra prime sales results) is an anomaly. This is a longterm trend.”
Once again, words matter. There is a huge differencebetween the rich and the super rich just as there is a huge difference betweenprime real estate and ultra prime real estate.