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Luxury Portfolio International, the world’s leading luxury residential real estate brokerage network, has shared a study on the state of luxury real estate as we head into 2021. And it must be said that the market currently remains very promising.
2021 ends with the luxury residential real estate market in some of its strongest shape ever. This is what Luxury Portfolio International revealed in a study revealing the real estate trends that the luxury segment is currently experiencing.
Indeed, the movement that began in the third quarter of 2020 of major purchases of luxury homes has continued throughout the year 2021. If supply still remains below demand, prices should continue to rise, as they have for many years. But if demand increases, the number of wealthy buyers will also increase.
This study takes into account individuals with incomes in the top 1 to 5 percent within 20 countries around the world.
Sustainability, durability and Covid-19 come into play
But what are the influencing criteria for the purchase of luxury goods ? 75% of the respondents indicate that they will choose their next home taking into account sustainable development. These individuals see it as a long-term investment, more likely to view their purchase as a home that will be passed on to their heirs. Furthermore, as interest in sustainability increases, the quality of the buyer improves to the benefit of the seller, as the former wishes to close a deal more quickly and for a relatively higher budget.
This is confirmed by the impressive figure of 90% of people who take the issue of sustainability relatively seriously when buying a house. These people move in most cases in order to be closer to their family, or because of their children’s studies, a change of career and other professional factors.
Indeed, it seems that the Covid-19 pandemic that hit the world in 2020 has changed some buying behaviors. Homes now need to be larger, to accommodate family, and to have provisions for telecommuting. Despite the small number of luxury buyers considering telecommuting as a significant concern (27%), it plays a role in the buying process. But with the risk of a repeat of the pandemic, especially from the Omicron variant, indoor comfort is now paramount, and space must be sufficient to make the most of home : Jacuzzi, game room, relaxation equipment… We demand the all-in !
The ever-present attraction of luxury
Internationally, more than 14 million affluent households continue to be interested in buying a home, including 6.4 million in the high-end category. This represents a 33% year-over-year increase. In addition, 1.2 million luxury homeowners have expressed interest in selling over the next three years, a 32 percent increase from the previous year. Record-high valuations are undoubtedly playing a key role in this decision.
While the exodus to outlying areas was one of the key findings of COVID-19, the study reveals that downtown luxury residential real estate is alive and well. Fifty-five percent of the world’s high-end property buyers plan to buy their next home in an urban area, and 77 percent of them will be near their place of work. It is worth noting that affluent buyers in Asia/Pacific are significantly more likely to opt for downtown than their counterparts in the rest of the world.
Furthermore, the popularity of single-family homes extends beyond North America. The study indicates that the popularity of single-family homes is increasing globally, with 40 percent of buyers in Europe/Middle East and 29 percent in Asia/Pacific looking for additional space and privacy. Year over year, demand for this type of housing is increasing as shared living spaces collectively become less attractive to the affluent. North America remains the main driver of demand for this type of residence.
A bright 2022 for luxury real estate ?
The global demand trend for residential real estate will continue to grow in 2022. The percentage of individuals looking to purchase residential real estate by the end of 2022 has increased from 19% in 2021 to 39% in 2022 in Europe, and from 30% in 2021 to 37% in 2022 in Asia/Pacific. 46% of respondents in the Middle East, including clients in Saudi Arabia and the United Arab Emirates, are most interested in acquiring residential real estate as they continue to diversify their assets. North America is showing modest growth from 21 percent in 2021 to 25 percent in 2022.
“After a record year in luxury real estate, we expect some balance to be restored to the market,” said Mickey Alam Khan, president of Luxury Portfolio International. “It’s important to look at the luxury market on a multi-year trajectory, knowing that half of 2020 has been paralyzed due to the pandemic. The market surge that occurred in the second half of 2020 has continued into 2021 and will continue its positive trajectory through 2022. The difference will be that the number of luxury sellers will be higher in 2022 than in 2021, and despite the lower proportion of actual luxury buyers, it will still be a sales-oriented market. The pandemic madness that led us to an overheated market is normalizing. Demand will remain strong, and a new healthy normal will begin to take hold in luxury real estate in 2022.”
Thus, all of these factors indicate that global price stabilization and market normalization are in sight for the coming year. There is no doubt that 2022 will be a very lucrative year for luxury real estate.
Read also > PARISIAN LUXURY REAL ESTATE IN GREAT SHAPE IN 2021
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Luxury Portfolio International, the world’s leading luxury residential real estate brokerage network, has shared a study on the state of luxury real estate as we head into 2021. And it must be said that the market currently remains very promising.
2021 ends with the luxury residential real estate market in some of its strongest shape ever. This is what Luxury Portfolio International revealed in a study revealing the real estate trends that the luxury segment is currently experiencing.
Indeed, the movement that began in the third quarter of 2020 of major purchases of luxury homes has continued throughout the year 2021. If supply still remains below demand, prices should continue to rise, as they have for many years. But if demand increases, the number of wealthy buyers will also increase.
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Luxury Portfolio International, the world’s leading luxury residential real estate brokerage network, has shared a study on the state of luxury real estate as we head into 2021. And it must be said that the market currently remains very promising.
2021 ends with the luxury residential real estate market in some of its strongest shape ever. This is what Luxury Portfolio International revealed in a study revealing the real estate trends that the luxury segment is currently experiencing.
Indeed, the movement that began in the third quarter of 2020 of major purchases of luxury homes has continued throughout the year 2021. If supply still remains below demand, prices should continue to rise, as they have for many years. But if demand increases, the number of wealthy buyers will also increase.
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