As Baron Rothschild would advise – when there’s blood on the streets, buy property. That’s true, especially in these turbulent times. With political and economic fluctuations high, high-end residential real estate remains an attractive and lucrative investment. That is the conclusion of Christie’s International Real Estate, in Luxury Defined, its annual analysis of global luxury residential housing dynamics, with pockets of record sales and increases in prices across the board.
It isn’t even certainly – the report found that today’s marketplace is more bifurcated, with benchmarks for high-end homes varying significantly from region to region – but that the market saw a historic number of US$100 million sales made in 2016. In fact, for the first time, the top 10 reported residential properties last year were all sold at above US$100 million, a figure of US$1.3 billion in aggregate. Million-dollar plus residential sales may have only grown by 1% annually last year, but through the first half of 2017 the market has seen an upward correction as global stock markets rallied. Ultra high net-worth individuals have contributed to unprecedented sales prices and volumes since January 2016, but the pattern is uneven – old havens are losing a bit of lustre, while new or re-emerging destinations are gaining ground.
“If 2015 was dubbed a time for a ‘return to realism,’ then 2016 – and now the first part of 2017 – is showing a move in the opposite direction… a shift toward more of a buyer’s market," observed Dan Conn, CEO of Christie’s International Real Estate. “The period of time since the end of 2015 could best be characterised by the old theory, ‘the earth is flat’ – albeit with very high peaks (most notably, The Peaks in Hong Kong, but also political safe havens like Canada), set against more turbulent waters witnessed in deep markets like the UK, which has had to deal with an election, new taxes from a ‘conservative’ government, Brexit, and yet another election."
While the whole volume is vast and makes for absorbing reading, the key takeaways of the 2017 Luxury Defined report are:
– Hong Kong is now the world’s top luxury residential real estate market, eclipsing London for the first time in the history of the report, and Toronto is once again the hottest million-dollar-plus market. Hong Kong leads in almost categories, setting new sales price records in the process.
– Luxury sales prices trended upwards slightly, with 2016 showing a 2% increase in home sale prices, a trend continuing in 2017.
– The definition of ‘luxury real estate’ continued to broaden and bifurcate from region to region in 2016 and into 2017. For example, luxury is defined as under US$1 million in Costa Rica, while it starts at $10 million+ in Monaco.
– The study’s Luxury Thermometer rankings, which rates the fastest-growing and hottest luxury markets, reveals that Canada has the top two spots: Toronto and Victoria, British Colombia, are No.’s 1 and 2, respectively.
– New markets entered the rankings of the world’s ‘hottest’ luxury markets, including four new cities in the report’s Luxury Thermometer Top 10: Charleston, South Carolina; Paris, France; Austin, Texas and San Diego, California
– In 2016, the world’s top sale registering in Hong Kong for $270 million.
– Markets to Watch include Washington, DC; the Lake Tahoe region of the USA.; Marrakech, Morocco; Belize and the Bahamas — where luxury markets are showing an uptick in activity.
– The ultra-luxury spec home market increased in 2016 as there was a boom in new developments and subsequent sales – Mon Reve in Los Angeles became the first spec home to sell in the USA for $100m. Developer Nile Niami’s US$100m spec home in Los Angeles features art work by Damian Hirst valued at £2million, while Billionaire, Los Angeles, a property on the market for US$250m includes impressive collection of classic and contemporary luxury cars, as well as fine art.
Some property highlights of the report include:
Villa Marrakech, Morocco. Price: US$2.403,846
Easily accessible, 5km from the central Marrakech and away from the bustle of the medina and hidden from view, this Villa lies in the middle of palm trees in the heart of the huge oasis that is the Palmeraie of Marrakech. The property boasts 10 bedrooms, 14 bathrooms, a pool and two boules greens.
Casa Redona, Belize. Price: US$1.499 million
Casa Redonda is a luxury 8 bedroom, 5 bathroom villa located on the 24m of beach adjacent to Hol Chan Marine Reserve, 6km south of San Pedro Town, on Ambergris Caye. The villa has gorgeous views of the Caribbean Sea and Barrier Reef.
Frozen and Alder Cays Island, Bahamas. Price: US$29 million
Two tropical private islands comprising 83+ acres located just 60km northwest of Nassau, accessible by private boat or seaplane. Fringed with pristine white powder beaches and turquoise waters, these island gems offer hidden coves and pristine reefs and are a natural bird sanctuary cloaked with lush native vegetation.