Global Trends in Luxury Real Estate

A 2015 study by Wealth-X analyzed the luxury real estate holdings of ultra-high net worth individuals around the world. To be defined as an Ultra-high net worth individual, (UHNWI) one must possess investible assets of at least $30 million, excluding personal assets, such as a primary residence, collectibles and consumer items. Ultra-high net worth individuals are categorized as the richest people in the world, controlling the lion’s share of global wealth.

As of 2015, the global population of ultra-high net worth individuals was about 211,275. Naturally, this demographic has a large influence on luxury real estate values, both in their home countries and abroad. Here are some interesting findings from the study!

These individuals make their luxury real estate decisions based on three distinct values: emotional value, practical value and business value.

  • Emotional value is weighed by the property’s proximity to family, and how well the location suits their daily lifestyle.
  • Practical value revolves around the standard of living and institutional setup.
  • Business value centers on the home’s proximity to local industry and the buyer’s financial base.

Ultra-high net worth individuals are very active in the luxury residential real estate market, with 79% of them owning at least two properties. About 50% of them own at least three properties. Here are other findings from the study:

  • UHNWI’s buy and sell real estate frequently, averaging one transaction every three years.
  • $2.9 trillion of their wealth is held in owner-occupied residential real estate.
  • UHNWI’s are increasing the number of properties they hold outside their home countries. The top 3 favorite locations: the United States, the United Kingdom and Switzerland.
  • Over 7% of UHNWI’s have made their wealth through real estate, up from 5% in 2013.

Ultra-high net worth individuals are increasing in population and in wealth, with self-made millionaires in the United States, China and Russia leading the growth.

The study’s findings suggest that domestic and foreign investment in luxury real estate will remain strong for the foreseeable future. While the energy sector decline and political uncertainties have slowed Houston luxury real estate sales during 2016, projections for the long-term are optimistic.

Need information about Houston luxury homes and the latest sales trends? Contact us today for your personal luxury real estate consultation!

KW Energy Corridor Team
Michael Bossart

11757 Katy Fairway | Suite 930
Houston, TX 77079

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