‘The Manor’ sold by Christie’s affiliate, Hilton & Hyland Real Estate, to Petra Ecclestone for a record $85 million
According to Christie’s, sellers worldwide are adapting to the new reality in luxury housing and slowly accepting that their residence is not going to command the same price that it might have in 2007. This is resulted in an increase in market activity as well as optimism, though the recent volatility in global economies has tempered slightly the enthusiasm initially reported in the first half of the year.
More than 67 percent of those surveyed -129 brokerages in the Christie’s International Real Estate network – confirmed their markets were more active through the first seven months of the year, when compared to 2010, despite many acknowledging that the increases were modest. Only 12.5 percent reported less activity in a year-on-year comparison. The latter were primarily from countries with troubled economies, such as Ireland and Greece.
Conducting the report…
The 129 brokerages in the Christie’s International Real Estate network were asked to complete a survey on the State of the Luxury Market. Select respondents were then contacted by phone to expand on the survey findings. The report captures the collective wisdom, experiences, and insights of the leaders of the network, the Affiliate Principals and management of Christie’s International Real Estate.
Not so surprisingly…
Properties priced at US$1–5 million are largely purchased as a primary residence by those still in the workforce. These buyers typically require some financing. Lending remains challenging in many traditional markets with aversion to risk continuing to dominate the headlines. Consequently, this lengthens the amount of time it takes to sell these homes.
Prime markets in Asia, Brazil, Switzerland, Canada, France, and central London continue to see robust demand with adequate funding availability. If there is a challenge in these markets, it is a lack of quality housing inventory.
“ Increasingly the very wealthy seem to be asking themselves, Do I really need all this? ”
Real estate portfolios of ultra-high-net-worth individuals include multiple residences, which is not surprising. Of late, however, they seem more inclined to downsize and simplify, there is an emerging conservative attitude. Increasingly the very wealthy seem to be asking themselves, ‘Do I really need all this?’
Cash continues to be king when it comes to purchasing a luxury home according to 87 percent of the Affiliate network. “At the peak of the market in 2007,” says Julie Faupel of Jackson Hole Real Estate Associates in Wyoming, “25 percent of our buyers paid cash and the rest financed their home purchase because financing was so inexpensive."
“Today, 60–70 percent of our clients are cash buyers and most are from the U.S. Like many international buyers, High-Net-Worth Individuals in the United States are also pulling their money out of the stock markets and investing in real estate as a long-term safe haven.”
If readers remember only one thing it should be…
67.5 percent of respondents to the Christie’s International Real Estate State of the Market Survey reported an increase in buyer activity for the first eight months of 2011, as compared to the same period last year. The largest upticks were reported in international “glamour” destinations worldwide, such as London, New York, Beverly Hills, Hong Kong, and Paris.
- When purchasing luxury real estate, value is a driving motivator.
- Confidentiality and discretion are more important now than in the past.
- The typical age of the international luxury buyer is between 55 and 60, but is skewing younger.
Luxury Society is pleased to share Christie’s International Real Estate full report with our readers. Please click here to download.
For more information regarding the research, please contact Christie’s Press Department via email: [email protected].