Butterfly Residential - Global Luxury Property Report April


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Global Luxury Property Review is a monthly report compiled for Butterfly Residential.

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Butterfly Residential - Global Luxury Property Report April

  1. 1. Global Luxury Property Review April 2013Luxury property market driven byscarcity and foreign buyers Limited inventory, strong international buyer demand, and high net worth individual’s increased appreciation for world class lifestyle offerings have pushed prices for luxury homes toward historic highs, a new study shows. The research from Christie’s International Real Estate compares the world’s top property marketsincluding London, New York, Hong Kong, Paris, San Francisco, the Cote d’Azur,Toronto, Dallas, Los Angeles, and Miami, to produce the firm’s first global indicatorfor luxury residential real estate.The Index ranks markets across key metrics including record sales price, prices persquare foot, percentage of non-local and international purchasers, and the number ofluxury listings relative to population.It shows that globally, top tier property sales achieved record prices in several cities,remaining immune to many of the economic concerns that drive the general housingmarket and that HNWIs are often more inclined to invest in an important globalmarket than in another city within their home country for second or additional homes. 1|Page
  2. 2. It found that prestige residential real estate values will more likely follow growthtrends of non consumable luxury goods such as fine art more so than the growthtrends of the general housing market.It also shows that cash transactions have dominated luxury property acquisitionsacross many cities but recent tax law changes in many of these markets are expected tonegatively impact on market activity in 2013.‘With financial markets providing a limited return on investment, high net worthindividuals are recognising the intrinsic value of investing in non-consumable assetssuch as prestige real estate and fine art,’ said Bonnie Stone Sellers, chief executiveofficer of Christie’s International Real Estate.‘Strong momentum in the luxury property market is also being driven by scarcity ofquality inventory and demand from international buyers in many of the world’s topdestinations,’ she added.London topped the index for the highest home sale price at $121 million followed byNew York at $88 million the Côte d’Azur recorded the highest percentage of bothsecondary home buyers, 95%, and international and non-local buyers, 90%.‘Ultra high net worth individuals with significant cash on hand, such as many of ourRussian clients, are not afraid to invest in Côte d’Azur real estate despite recent marketvolatility,’ said Niki Van Eijk of Christie’s International Real Estate affiliate MichaëlZingraf Real Estate in Cannes.‘These multi millionaires and billionaires are still keen to purchase property in the areafor leisure purposes. They do not purchase these homes in order to flip theirinvestments, rather they may purchase a spectacular home in Cannes or Cap Ferrat toenjoy the region’s wealth of available cultural and leisure pursuits,’ explained Van Eijk.Toronto’s real estate market, which has remained buoyant in recent years of globalturmoil, recorded the lowest amount of days on the market for luxury listings at 46days. However, the report says that this trend began to reverse in the second half of2012 and the number of days on market is expected to lengthen in 2013 as a result ofthe implementation of new restrictions on mortgage financing intended to cool thehousing market.Part of the success of the Miami market in 2012 was fuelled by South American buyersconcerned with their own local economic conditions. ‘International buyers, inparticular have been purchasing Miami property as a result of uncertainty in theircurrencies, which have often been devalued against the US dollar,’ said Ron Shuffieldof Esslinger Wooten Maxwell Realtors, the Christie’s International Real Estate affiliatein that city.Source: PropertyWire 2|Page
  3. 3. Billionaires property buying spreeGlobal billionaire activity in world real estate markets has been so intense over the lastseven years that it has led to a doubling of property values in this sector, saysinternational real estate adviser Savills, in its latest World Cities Review.Although overall, aggregated world values did fall somewhat after 2007 and pricemovements seem relatively volatile, recovery has been significant since 2009 sobillionaire markets have exceeded the growth seen in mainstream markets of the sameworld cities.It has been rising commodity prices and the creation of new, ultra-rich classes in Chinaand Asia that has precipitated the highest growth in ultra-prime real estate values.Singapore and Mumbai stand out as having seen the highest growth in ultra-primevalues since 2005 (at 232% and 176% respectively). Both grew from a relatively lowbase while the highest overall values are seen in Hong Kong.Cities in newly emerged economies have significantly outperformed those in the ‘oldworld’ economies of the US, Japan, Australia and Europe. Only London’s ultra primemarket stands out among the ‘Old World’ cities as having shown significant growthsince 2005, totalling 107%. New York’s billionaire real estate stands only 47% higherand Tokyo ultra-prime residential is only 8% more expensive (in local currency) than itwas in 2005.Source: SavillsOther luxury property news:London luxury price rally to slow down, GrosvenorGrosvenor Group Ltd., the real estate company owned by the Duke of Westminster’sfamily trusts, said it’s looking to buy rental properties for middle-income tenants asLondon’s five-year luxury-home boom may be ending.Grosvenor will target rental-home purchases because the value of luxury propertiesmay climb at a slower rate, Chief Executive Officer Mark Preston said in a telephoneinterview today. The London-based company may partner with pension funds in theinvestments, he told Bloomberg Businessweek.Source: Bloomberg 3|Page
  4. 4. Strong luxury home sales Q1 of 2013 for Las VegasKenneth Lowman of Luxury Homes of Las Vegas reported strong luxury home sales inthe first quarter of 2013 for Las Vegas and Henderson, Nevada. There were a total of 54luxury homes sold at or over $1 million in the first quarter of this year. This comparesto just 33 luxury homes sold in the first quarter of 2012. Just five of the fifty-four saleswere distressed or bank owned sales, just under 10% of the total.Source: SFGate.comDubai luxury property up 9%Real estate experts Cluttons has said average prices for high-end villas in Dubai are upby nearly 9% over the past six months.Cluttons said luxury villa prices have increased on average by 8.9 percent between Q32012 and Q1 2013, while mid-range villas have experienced gains of 14.9 percent overthe same period.Source: ArabianBusiness.comUK residential property prices up 1.9%Residential property prices in the UK increased by 1.9% in the 12 months to the end ofFebruary 2013, the latest data from the Office of National Statistics shows.Source: PropertyWireMore searching for overseas property location, reportMore than half (51%) of overseas property locations saw an increase in search activityin March 2013, according to the latest monthly report from Rightmove Overseas. Withnotable increases in search activity seen for Cyprus, Madeira and Turkey. 4|Page
  5. 5. Property SpotlightLuxury Villa in La Moraleja, MadridM agnificent and unique, this is outstanding, luxurious family home situated in La Moraleja, Madrid, is providingelegant and spacious accommodation – perfect for today’s family lifestyle and entertaining.La Moraleja is the Madrileño version of Beverly Hills, a tranquil and spacious oasis of luxury villas with privategardens. Its residents include the internationally rich and famous, film stars, impresarios, politicians and top companydirectors.For further information about this property, the price and more photographs of this stunning Luxury Villa in LaMoraleja, Madrid visit the Butterfly Residential website here or click on one of the images. About Butterfly ResidentialThe Global Luxury Property Review is a monthly article compiled by Butterfly Residential offering a snapshot of thesector. Butterfly Residential is a boutique, professional, high-end property company specialising in sales and rental ofluxury property Marbella, London and Barbados, among others. Butterfly Residential is headed by Edward Fairlessand Nicola Fairless, a brother and sister team who are the new sensation in the global luxury property sector.Address: Avd. Ricardo Soriano 72, Edf. Golden, Portal C, 2º H, 29601 Marbella, Málaga, España Email: info@butterflyresidential.com Web: http://butterflyresidential.com Tel: (+34) 662 258 896 Tel: (UK) 0208 1444 383 Skype: butterflyresidential 5|Page