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By Lauren Hill | January 26 2017
Created in collaboration by stalwart real estate firm Warburg Realty and global property specialists Barnes International, alongside the wealth insight provider Wealth-X, the Global Property Handbook is the first ever report to have been compiled on the luxury global real estate market. Along with the buying trends of ultra-high net worth individuals, and discovering where the wealthiest people in the world choose to live and invest, the report looks into the factors that affect their buying decisions.
In addition to the findings that half of the world’s ultra-wealthy individuals own two or more homes – and of these, around 10 percent own five properties or more – the report’s Alpha Cities Index ranks locations across the globe for their desirability to people of high net worth; London, New York and Tokyo came in first, second and third.
For ultra-wealthy real estate investors, the decision on where to buy property is influenced by a number of emotional and practical factors, as well as financial reasons. And the most desirable locations meet all three criteria. Naturally, buyers wish to buy property in a city they do business in, as well as a location that boasts outstanding education institutions. Travel connections are another key factor, along with the proximity to the individual’s favorite leisure pursuits.
The emotional factors that prove most influential, meanwhile, range from the size of a property and the desirability of the immediate surroundings – whether for a view or the neighborhood’s exclusivity – to the proximity of a city’s cafes, restaurants and bars.
Despite uncertainty caused by Brexit, London proves to be enduringly popular among wealthy individuals for both practical and emotional reasons, from the city’s heritage and culture, to its financial security. Cultural richness, luxury shopping, education and connectivity are major factors, as well as the ease of doing business the city affords, and the number of high net worth individuals who reside here.
After London, New York comes in a close second, boasting the world’s largest population of ultra-wealthy individuals. As well as an exceptional offering of universities, New York offers residents a strong cultural base and outstanding air travel links, along with an extensive luxury retail offering, and highly developed financial services.
Tokyo then follows on from New York, as the wealth center of Asia. In addition to being considered a prime luxury shopping destination, it’s the rich cultural tradition and great financial strength that makes Tokyo so enticing, plus the benefit of having Asia’s highest population of wealthy individuals.
When considering the area in each city to head to, luxury real estate buyers are consistently drawn to the prestigious neighborhoods of Belgravia, Knightsbridge and Mayfair in London, alongside scenic riverside and park-side locations. In New York, Manhattan remains the most desirable area, but more luxury real estate developers are turning to neighboring boroughs, too. Then in Tokyo, it’s areas such as Azabu and Shibuya in the heart of the city that draw the most high net worth individuals in.
Sydney and Paris follow in ranking for the particularly desirable lifestyle they each afford, while the top spot for the wealthy to buy a second home has been identified as Los Angeles. Havana is predicted to be the biggest emerging location for luxury real estate developers. Find out more about the locations listed in the Alpha Cities Index, and which destinations are predicted to attract more luxury real estate developers, by reading the full report over on www.wealthx.com.