Emerging Luxury Property Markets Reshaping Global Landscape as Sales in Some of the Major Primary Markets Begin to Slow

New study provides first hand insights into 100 luxury housing markets around the world

NEW YORK--()--Now, more than ever, the health of local luxury real estate markets vary across the globe. Sales volumes for prime property in markets such as New York, Hong Kong, and London plateaued in late 2015 and into 2016, while emerging luxury markets continued their steady evolution. And numerous ‘comeback’ markets like Dublin and Detroit are enjoying a new era of growth after years of declines. This can be attributed to a range of key contributors, from shifting financial concerns and the impact of currency flows, to the changing preferences of high-value property buyers.

“The combination of high-volume and record-breaking prices were unsustainable at peak levels”

These, plus many other factors related to the worldwide luxury residential market, are noted in Luxury Defined a just-released annual study by Christie’s International Real Estate, the world’s leading high-end residential real estate network. Key findings of the report include:

  • While there was a slowdown in growth in some significant primary luxury markets throughout the world like New York and London, several less prominent markets which took some time to recover from the global recession perform well
  • Several cities that have seen an explosion in affluent migration, new industry wealth creation, and an uptick in their general economy, particularly those that remain "affordable" compared to nearby prime markets, are experiencing incredible growth in both million-dollar-plus home sales and prices generally.
  • ‘Comeback’ markets, once-stagnant luxury residential markets that are now witnessing positive turnaround, were another key element of the study. These markets are fuelled by positive economic growth – and often driven by the tech sector and similar burgeoning industries – with destinations such as Auckland, Dublin, Monterrey, and Atlanta, among others, experiencing high double-digit increases in sales.
  • Exchange rates, coupled with other financial and political concerns are impacting the ebb-and-flow of the international luxury market, creating opportunities for some currency strong buyers and challenges for others.
  • Despite attempts by governments to reshape top global markets and deter ultra prime property buyers in cities such as Hong Kong, many of the world's most affluent individuals continue to turn to property as a stable asset class.
  • Increased attention on the transparency of prime property markets may dissuade some legitimate privacy-sensitive buyers, but will not in the long term deter buyers as they continue to appreciate the lifestyle draws, financial benefits, and collectible appeal of luxury home ownership
  • Globally, well priced trophy homes continued to command strong prices in the world’s top cities. Several markets surpassed all-time local record prices in 2015 and to date in 2016. However, the new luxury landscape has presented challenges at the highest levels as a widening disparity is growing between what buyers and sellers consider fair market value for prestige properties.

The report examines 100 luxury real estate markets and provides first-hand insights into the drivers shaping them. The annual Christie’s International Real Estate Index, which compares key data and luxury house price metrics, yielded a new set of global benchmarks for 2015 and provided a closer look at the overall health of the luxury marketplace.

“The combination of high-volume and record-breaking prices were unsustainable at peak levels,” said Dan Conn, CEO, Christie’s International Real Estate. “There needed to be a slowdown in these key markets and that is what began to occur in the middle of 2015 and into 2016. This is what we call a ‘return to realism’ year. Beyond that we observed 2015 and 2016 to date as the age of the underdog, with less prominent markets performing extremely well.”

Additional highlights from Luxury Defined include:

  • For the fourth year in a row, London commands the top position as the world’s most luxurious property market. The top five is rounded off by Hong Kong, New York, Los Angeles, and Singapore.
  • Auckland, New Zealand supplants Toronto, Canada as the world’s “hottest” (based on increase in number of luxury home sales, absorption in the luxury market and decrease in average days on market) luxury real estate market, part of Luxury Defined’s “Luxury Thermometer” scale. The top five include Auckland, Toronto, Victoria, Valencia and San Francisco, respectively.
  • The report outlines enormous differences in the definition of luxury, with homes in Palm Springs, California still defining luxury as $1 million and higher, but areas such as Monaco now defining the start points of luxury at $10 million. Other notable cities re-defining luxury include Los Angeles, New York, and Hong Kong ($5 million); London ($7 million); and Sao Paulo ($1 million).
  • Primary housing markets experienced an overall 8% increase in million-dollar-plus home sales as the global housing market returned to more traditional growth rates following several years of year-on-year increases at breakneck speed. Singapore, New York, London, and Hong Kong are experiencing slowdowns in sales, while Toronto, San Francisco, Paris, and Sydney continue to see overall sales growth.

Contrary to other research real estate studies, Luxury Defined not only comprises standard luxury property market measurements – such as top sale prices, volume of luxury home sales, average sale prices, etc. – but also establishes benchmarks by sub-market in order to assess trends among truly comparable homes.

Christie’s International Real Estate is wholly owned by Christie’s and is committed to its core values of expertise in marketing luxury assets, exemplary client service, and discretion. The Luxury Defined study can be accessed at christiesrealestate.com/luxury-defined.

Connect with Christie’s International Real Estate on Twitter @christieshomes, on Instagram @christiesrealestate, and join the conversation about the findings with #LuxuryDefined.

About Christie’s International Real Estate

Christie’s International Real Estate is an invitation-only affiliate network composed of the world’s most proven and qualified real estate specialists in the luxury residential sector. The company has offices in London, New York, Hong Kong, Moscow, Los Angeles, and Palm Beach, and approximately 135 global affiliates with 32,000 real estate professionals in 45 countries. For additional information, please visit www.christiesrealestate.com.

Contacts

Christie’s International Real Estate
Lisa Bessone, +1-505-603-8039
lbessone@christies.com
or
Luchford APM
Tania McNally, +44 (0)20 7631 1000
cire@luchford.com
or
Kreps DeMaria
Israel Kreps, +1-305-663-3543
cire@krepspr.com

Website

Release Summary

Christie's International Real Estate has released its annual whitepaper study, Luxury Defined, which provides first-hand insights into 100 luxury housing markets worldwide.

Christie’s International Real Estate