World's Wealthiest Prefer Home in This City Over NYC, New Survey Says
Despite the ongoing trade war’s impact on the real estate industry, Hong Kong tops the ranking for the greatest number of sales in the ultra-prime residential market worldwide, as per the latest survey by global real estate consultancy Knight Frank LLP. The world’s priciest location of residential projects, garnered the highest number of transactions worth $ 2.5 billion in the 12-month period ending August 2018.
In the first-ever assessment done by Knight Frank of the global ultra-prime residential market, Hong Kongalso emerged as the most expensive ultra-prime market, with an average price of $52.8 million paid, while New York and London takes the second and third place, respectively.
According to the research, the top six ultra-prime city markets of Hong Kong, New York, London, Singapore, Los Angeles and Sydney reported 153 transactions above $25 million in the 12-month period with a combined value of $6.6 billion. The combined transaction levels in these cities grew by 12 per cent in the past two years and the rise in growth is set to persist.
About the new development, the global head of research at Knight Frank, Liam Bailey says, “The relentless creation of private wealth globally over the past decade has fuelled the growth of ultra-prime residential markets. We have assessed the world’s leading luxury markets to reveal 17 true ultra-prime destinations.”
He adds, “In addition to identifying the existing top-tier markets globally, we have also detailed those markets, which are on the trajectory to join the ultra-prime ranks led by locations like Dubai.”
Second Home Markets
The research states Malibu, Palm Beach, Cote d’Azur, Monaco, the Caribbean and ski destinations such as the Alps and Aspen are among the top 17 locations as second home markets with the majority witnessing an uptick in sales volumes over the past three years.
While giving the global perspective, the report says, the ultra-prime market in New York grew by 50 per cent between 2015 and 2017. It sits in second place in terms of number of transactions achieved in the past 12 months (worth $1.5 billion). On the other hand, London topped the rankings in 2015 with the highest number of transactions (worth $2.9 billion) but slipped to third place in the most recent 12-month period. Higher stamp duty charges and concerns over Brexit have led to a decline in the number of ultra-prime sales. However, the city remains one of the top three ultra-prime markets.
Rise of Underdogs
Further, Singapore saw the number of ultra-prime sales drop to two in 2016. However, the countrybounced back to 12 in the most recent 12-month period, demonstrating the underlying health of the market. Los Angeles has seen significant growth in this market with the number of transactions growing by 260 per cent between 2015 and 2017, albeit from a low base.
The 2018 Wealth Report by Knight Frank highlights that the global ultra-wealthy population ($50 million+ in net assets) grew by 18 per cent in the five years up to 2017 and is forecast to increase a further 40 per cent over the next five years.
This growth is likely to mean transactions at the ultra-prime end of the market will continue to increase and spread to more locations. Other cities such as San Francisco, Chicago, Dallas, Beijing and Shanghai may soon rise in the rankings and second home markets such as Sardinia, Portofino and the French Alps are also likely to see more activity at this level.