Move over New York, lux­ury deals are now be­ing struck in the east

The sale of a sin­gle-fam­ily home in Hong Kong for a record break­ing 1,287 crore was the most ex­pen­sive real es­tate trans­ac­tion in the world

HT Estates - - HTESTATES - Nam­rata Kohli

W₹ hich were the biggest real es­tate trans­act i ons around t he world in 2015? The high­est priced real es­tate sales world­wide in 2015, ac­cord­ing to the lat­est an­nual Lux­ury De­fined 2 0 1 6 r e por t by Christie’s In­ter­na­tional Real Es­tate, were steered by the record $ 193.5 mil­lion (₹ 1287 crore) sale of a sin­gle-fam­ily home in Hong Kong’s The Peak dis­trict.

The top five sales rounded out with the $141 (₹938 crore) mil­lion sale of a town­house in Lon­don; a $91.5 mil­lion (₹608 crore) new de­vel­op­ment pent­house in New York; a $77.5 (R515 crore)mil­lion co-op in New York; and a $71.2 (₹473 crore) mil­lion sin­gle-fam­ily home in Palm Beach, Florida. At least four prop­er­ties have sold for $50mil­lion (₹332.6crore) or more around the world in 2016.

The high­est per­for ming (price per­for­mance) mar­kets in the world in­clude Lon­don, Hong Kong, New York, Los An­ge­les and Sin­ga­pore. For the fourth year in a row, Lon­don com­mands the top po­si­tion as the world’s most lux­u­ri­ous prop­erty mar­ket (in terms of price per­for­mance). De­spite new taxes on £1.5m-plus homes and cap­i­tal gains tax, Lon­don con­tin­ues to at­tract do­mes­tic and in­ter­na­tional buyer de­mand.

Hong Kong nar­rowly edged out New York to place sec­ond in the lux­ury in­dex even with neg­a­tive an­nual over­all sales growth and pres­sures from a de­cline in main­land Chi­nese cap­i­tal out­flow. Sin­ga­pore knocked Dubai— where pres­sures from de­clin­ing oil prices and an over­sup­ply of lux­ury prop­er­ties caused price and sales vol­ume de­clines — out of the world’s top 10 lux­ury mar­kets.

Which is the world’s “hottest” city for lux­ury real es­tate? The an­swer is Auck­land, which posted a 63% growth in mil­lion- dol­lar- plus sales thanks to strong in­ter­na­tional and lo­cal de­mand. The find­ings were based on Christie’s In­ter­na­tional Real Es­tate sur­vey of 100 af­fil­i­ate mar­kets. Auck­land over­takes Toronto as the world’s hottest lux­ury hous­ing mar­ket.

Tra­di­tion­ally strong mar­kets are fac­ing the heat of the down­turn and giv­ing way to cre­ation of new mar­kets. For in­stance, the tra­di­tion­ally strong mar­kets for in­ter­na­tional buy­ers such as New York, Lon­don, and Mi­ami have re por t ed a de­crease i n buy­ers f rom coun­tries in­clud­ing Rus­sia and Brazil. Ex­change rates, cou­pled with other fi­nan­cial and po­lit­i­cal con­cerns have ne gatively i mpacted some mar­kets but at the same time, they have cre­ated op­por­tu­ni­ties in oth­ers, par­tic­u­larly emerg­ing lux­ury mar­kets such as Cape Town, South Africa; Carta­gena, Colom­bia; and Dublin, Ire­land; Ar­gentina and Canada. Strength of the Pound and tax in­cen­tives en­cour­aged UK in­vestors to pur­chase pre­dom­i­nantly in the US, France, Spain, Ber­muda and Ire­land.

Which coun­try’s in­vestors are the most ac­tive in global real es­tate? As many as 21% of all lux­ury mar­kets ranked UK buy­ers in their top three. Of those, 92% saw an in­crease/ con­stant flow of UK buy­ers and only 8% saw a de­crease. A weak Euro pre­sented op­por­tu­ni­ties to pur­chase sec­ond homes in prime Euro­pean des­ti­na­tions, in­clud­ing Paris. Chi­nese in­vestors are still ac­tive de­spite slow­down in the econ­omy and stock mar­ket sell off. Chi­nese cur­rency de­val­u­a­tion, stock-mar­ket sell offs, tight­en­ing cap­i­tal flow re­stric­tions didn’t slow the buy­ing power of China UHNWIs.

Fi­nally, who is driving the growth in mil­lion-dol­lar-plus homes? De­spite the eco­nomic slow­down, there is a set of emerg­ing buy­ers driving mil- lion- dol­lar- plus home sales. Ac­cord­ing to Dan Conn, CEO, Christie’s In­ter­na­tional Real Es­tate, “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 resur­gence in some of th­ese ‘come­back’ mar­kets.”

Hong Kong is among the high­est per­form­ing mar­kets in the world.

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