Sunday, November 29, 2015   

Global luxury housing on a roll

Tony Liaw

Thursday, March 28, 2013

Robust economic recovery continues to keep luxury property markets going, turning them into quite an immune investment.

Housing markets around the world including London, New York, Paris, San Francisco, Los Angeles and Hong Kong have got off to a strong start this year, reports indicate.

Christie's International Real Estate, a high-end property affiliate network under Christie's auction house, has launched a new index that compares world real estate markets by different metrics - including sales price, prices per square foot and percentage of foreign buyers, among others.

London topped the index with a record sales price of more than US$121 million (HK$943.8 million) for a home last year.

The second was New York, where a residential property sold for US$88 million, marking a record in the city in 2012.

While some economists expect worldwide housing markets to slow down, others believe luxury homes are immune from overall economic movements.

"Except where there is government intervention, luxury residential real estate values will likely follow luxury goods and not the general housing market, and are therefore poised to increase in many of the cities studied in 2013," said The Real Deal magazine, citing research by Boston Consulting Group.

"This is particularly true as high net worth individuals turn their luxury investments toward nonconsumables and experiential luxury products that have lasting values."

Bonnie Stone Sellers, chief executive of New Y
ork-based Christie's International Real Estate, said the luxury homes market is backed by scarcity of quality inventory and demand from international buyers in many of the world's top destinations. There are more billionaires across the globe now than before, according to a Christie's report.

And these people are particularly keen to buy homes across borders, especially when the local economies of their home towns are turning uncertain and even becoming more riskier in the near term. Agents have long been ready for more buyers from all over the world.

Dolly Lenz, vice chairperson at Prudential Douglas Elliman Real Estate, said affluent buyers from Britain and China are usually willing to pay more.

Lenz said the prolonged environment of record low interest rates - which is expected to stay until 2015 - is not the major reason for foreign money rushing into the New York property market.

"Many of these people pay cash, and the others would need mortgages at probably 60 percent of the home prices," Lenz said in a report on her own website.

These wealthy global buyers may not seek to buy a property in New York merely for the sake of investment, according to another realtor based in the city.

"Many of them are not just looking at this as a place to dump their cash," Pamela Liebman, president of Corcoran Group, told the Wall Street Journal. "They want a place they can use and enjoy when they come to New York; many of them have family here."

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