Sotheby’s 2015 Wealth-X Luxury Residential Real Estate Report
Download the report here.
Ultra Wealthy Buying Homes As ‘Opportunity Gateways’
For Investment Diversification And Citizenship Or Foreign Residency
New York, 12 August 2015 – A growing number of ultra high net worth (UHNW) individuals view homes as ‘opportunity gateways’, driving buying decisions that are based on potential opportunities from owning these luxury residential properties, according to the latest study by Wealth-X and the Sotheby’s International Realty® brand released today.
The UHNW Luxury Real Estate Report: Homes As Opportunity Gateways reveals two trends that are fueling the rise in the number of ultra wealthy individuals who are buying luxury homes:
(1) International home-buying by UHNW individuals (defined as those with at least US$30 million in assets) from emerging nations seeking a safe investment diversification.
(2) Home-buying as part of a program to gain citizenship or residency status in foreign nations.
The report provides insight into the UHNW residential real estate opportunities in Sydney and Vancouver for buyers seeking safe investment diversification; and Malta, the Bahamas and Sao Paulo, which may appeal to ultra wealthy buyers who are seeking citizenship or residency through property investment.
The UHNW Residential Real Estate index, tracked by Wealth-X, rose to 115.2 in Q2 2015, an 8.3% rise year-on-year, and the sixth consecutive quarter in which the index has risen. The continued rise in the index reflects the confidence of UHNW individuals to invest in luxury residential real estate.
The index takes into account the full range of luxury residential properties that are owned by the world’s wealthiest individuals. Wealth-X data shows there are 211,275 UHNW individuals globally, who collectively hold nearly US$3 trillion in real estate assets, equal to 10% of their net worth.
Below are other key findings from the report:
- 12% of second homes purchased by UHNW individuals in emerging countries (those who reside in BRICS nations) are located outside their country of residence.
- Recent market fluctuations in emerging nations are leading a new generation of UHNW investors to consider investing in luxury residential real estate in Western markets.
- Chinese UHNW individuals make up the third largest share of foreign UHNW homeowners in the United States, behind only Canada and the United Kingdom.
- Twenty nations in Europe and the Americas now offer citizenship or residency programs to individuals willing to invest in domestic residential real estate.
- Many residential real estate markets with such programs – including Sao Paulo, Malta, and the Bahamas – offer good long-term investment opportunities.
Wealth-X President David Friedman commented: “Wealth-X is pleased to partner with the Sotheby’s International Realty brand for this third luxury real estate report for 2015. This new joint study explores the trends and home-buying motivations of a distinct group of ultra wealthy individuals in the emerging markets. As their wealth grows, so will their investment fueled by various motivations, be it to diversify their portfolio or to gain citizenship or residency in a foreign country.”
According to Philip White, president and chief executive officer, Sotheby’s International Realty Affiliates LLC, this joint report was designed to provide an understanding of the trends driving buying decisions of ultra high net worth individuals around the world. “The research reveals trends that go beyond traditional motivations and help guide real estate investments that
contribute to long-term wealth,” he said. “It underscores the important role real estate plays
in a larger strategy to build a valuable asset portfolio.”
Wealth-X is the global authority on wealth intelligence, providing sales, marketing, strategy and compliance solutions to clients in the financial services, luxury, not-for-profit and education sectors. Its award-winning research and thought leadership are regularly cited by the world’s media such as CNBC, Financial Times, Thomson Reuters and BBC. Wealth-X has more than 250 staff in 10 locations, including Singapore, London and New York. (www.wealthx.com)
About Sotheby’s International Realty Affiliates LLC
Founded in 1976 to provide independent brokerages with a powerful marketing and referral program for luxury listings, the Sotheby’s International Realty network was designed to connect the finest independent real estate companies to the most prestigious clientele in the world. Sotheby’s International Realty Affiliates LLC is a subsidiary of Realogy Holdings Corp. (NYSE: RLGY), a global leader in real estate franchising and provider of real estate brokerage, relocation and settlement services. In February 2004, Realogy entered into a
The Sotheby’s International Realty network currently has approximately 17,000 sales
associates located in approximately 800 offices in 61 countries and territories
long-term strategic alliance with Sotheby’s, the operator of the auction house. The agreement provided for the licensing of the Sotheby’s International Realty name and the development of a full franchise system. Affiliations in the system are granted only to brokerages and individuals meeting strict qualifications. Sotheby’s International Realty Affiliates LLC supports its affiliates with a host of operational, marketing, recruiting, educational and business development resources. Each Office is Independently Owned and Operated. Franchise affiliates also benefit from an association with the venerable Sotheby’s auction house, established in 1744.