Key facts about the world’s wealthy1. There are more wealthy than ever before and their wealth is growing!The Number of households with financial assets in excess of $1million (excluding property) --Source: Barclays Wealth Insights Country 2006 2016 % Change Canada 133,000 426,000 +220% France 234,000 611,000 +161% Germany 285,000 1,017,000 +257% Italy 359,000 712,000 + 98% Japan 1,008,000 3,286,000 +226% UK 295,000 940,000 +219% USA 3,941,000 8,878,000 +125%
Key facts about the world’s wealthy2. Most of the wealthy made their own moneyArea Primary wealth Secondary wealth source sourceWORLD Business Ownership IncomeNorth America Income Business OwnershipEurope Business Ownership InheritanceLatin America Business Ownership IncomeMiddle East Inheritance IncomeAsia Business Ownership IncomeMore new money than old! Source: World Wealth Report, Merrill Lynch/Capgemni
Key facts about the world’s wealthy3. The wealthy hold residential real estate in their investment portfolios – a second, third, or fourth home may be a portfolio play as much as a lifestyle decision. – Of those who have a million dollars or more in investable assets, 12% of their portfolios is in residences , excluding the primary home
Key facts about the world’s wealthy4. The wealthy are citizens of the world• Globally, 25% of the wealthy have residences in multiple countries – 46% of wealthy Europeans have residences in multiple countries – 80% of wealthy Middle Easterners have residences in multiple countries• 19% of the US rich have children living abroad Source: World Wealth Report, Merrill Lynch/Capgemini
Prime International MarketsLocations where international buyers make up 20% of all home purchases and make 40% of the most expensive purchases. Ranked by price.1. London 11. Moscow 21. Edinburg2. Monaco 12. Venice 22. Manchester3. New York 13. St. Petersburg 23. Cape Town4. Hong Kong 14. Florence 24. Brussels5. Tokyo 15. Geneva 25. Prague6. Cannes 16. Madrid 26. Delhi7. St. Tropez 17. Dublin 27. Beijing8. Sydney 18. Milan 28. Shanghai9. Paris 19. Birmingham 29. Kuala Lumpur10. Rome 20. Mumbai 30. Sao PauloSource: ‘07 Annual Wealth Report, Citi/Knight Frank
Key facts about the world’s wealthy5. It costs a lot to be wealthy! – The “cost of living extremely well” has been rising faster than the general cost of living. But for the affluent, wealth is not just about what money can buy, it’s about enriching one’s life6. Time is the wealthy’s most valuable resource – Having the time to do the things which enhance “quality of life” is the ultimate luxury – Delivering service which makes the process stress free and saves time for the client is your key to delivering value!
Key facts about the world’s wealthy7. The quest for privacy and exclusivity continues to be strong motivators – There is a retreat away from mass affluence – They want customization plus a WOW! factor – Safety concerns are also growing in importance8. The wealthy are looking for experiences – From homes with olive groves to adventure locales – Exotic locations are in demand (Istanbul, Morocco…) – Remember that stories sell !
Key facts about the world’s wealthy9. There are three “most important influences” on choice of property 1. Unique features of the residence 2. The Lifestyle the home represents 3. The long term investment potential
Key facts about the world’s wealthy10. For some, an über home is the ultimate prize – There’s a competition for the biggest yacht and the most expensive house . Russian billionaires are major players in the competition for trophy properties.11. For others, concerns about the environment are becoming part of the residential real estate investment agenda (Note: With second home locations, there is some concern over future climate risk and congestion)
Key facts about the world’s wealthy12. The search continues for tax havens – This is most important for primary residences
Tips for getting started with international buyers• Do your homework – define your targets – Research who’s coming to your area • Identify foreign companies • Check tourism records – Where visitors are from may provide clues about where best prospects originate • Get to know the staff at your local economic development board and Chamber of Commerce • Network with travel agents
• Research the countries which you decide to target – Recognize that real estate business practices are different • Understand how they do business. • Identify the likely sources of referral business (agents, attorneys, financial advisors? ) – Read about the countries you are targeting • Study the map. Learn a bit about the culture and history – Look at their homes and lifestyles
• Look for local connections – Foreign chambers, embassies, or trade missions in your area? – How can you connect with the existing immigrant / visitor community?
• Join and participate in the community of international real estate professionals – International Real Estate Federation (FIABCI) www.Fiabci-USA.com • An organization designed to link you to other professionals in 65 countries • Gain contacts, best practices and more! • Start your networking by calling or emailing to connect with other members
• Research and use the resources available – NAR’s Certified International Property Specialist designation (CIPS) offers: • Training in dealing with the special challenges of working with an international clientele • Credibility around the world • A network of other agents targeting the international home buyer and seller
• Research and use the resources available – International Consortium of Real Estate Associations (ICREA) • You have access through your NAR membership • Realtor or equivalent associations in countries around the world who joined together to: – Help develop international business standards – Create an international referral protocol – Offer listings internationally on www.WorldProperties.com and on the Global New Homes Resort Portal – Provide training leading to “Transnational Referral Certification”Note: Your listing is FREE on World Properties if you have a Realtor.comenhanced listing. Ask your Realtor.com account rep for details
• Research and use the resources available – NAR offers tools at www.Realtor.org • Power Tools for International Practitioners BLOG • Global Perspectives quarterly newsletter • Monthly International eReport • Self-study PowerPoint Presentations on currency conversions, foreign business practices and other topics.
• Go on foreign Trade Missions – Trade groups will usually help set up appointments and facilitate travel for you (often at low rates) – Networking with other non-competing professionals who are attending is very valuable
• Go to International Real Estate Expos (in the US and abroad) – Walk the floor and work the show – Try to talk to an experienced attendee in advance to “learn the ropes” – Handout a small, professional marketing piece highlighting your market and you – Smile, don’t be pushy, establish rapport Find schedules of International Meetings and Conferences and lists of Trade Missions on the CIPS section of the Realtor.org website
• Avoid being “the ugly American” – Be polite and respectful, dress professionally, be knowledgeable• Network, network, network – Personal connections are important • Take it slowly • Establish a relationship – they want to know you before doing business with you • Find a common connection • Work to build trust • Write thank you notes • Stay in touch!
• How can I go abroad? I don’t speak the language! – You don’t need to… • Learn some key phrases and use them • The US embassy can help you find a translator (You want one with good people skills and a real estate vocabulary) • This works with foreign language speakers who come to the US, too. Find a translator you can count on
• Put together an expert team – Attorney, tax advisor, currency exchange specialist, title company that will provide a translator and have closing documents in client’s language (Stewart Title has this service) …• Be an expert yourself – Learn what is required of a foreign buyer and seller – Understand their special needs – Recognize that they need extra care and attention
More opportunities!As you develop international prospects who wish to buy and sell in the US, you’ll also find opportunities to list or co-list properties abroad