Real estate is a growing passion for high-net-worth individuals and is often seen as the ultimate sign of success. It is a lifestyle choice, a discretionary purchase that represents recognition and reward for their hard work as much as an investment.
That’s the finding of the Affluent Perspective 2016 Global Study just released by international market research company YouGov in association with Luxury Portfolio International©.
Researchers who polled more than 5000 wealthy individuals worldwide for the study found that over the next three years the intention to purchase real estate far exceeds the intention to sell, globally as well as in the US, which is where more than half the High Net Worth Individuals (HNWIs) in the world live.
Within the US, the study found, 25% of the wealthy are looking to purchase more real estate in the next three years, while 18% are looking to sell. Outside the US, 45% of the wealthy are looking to purchase with 23% looking to sell.
“In other words, the balance of potential buyers to sellers outside of the US is almost 2 to 1 right now, which is positive and encouraging news for the luxury real estate sector in countries like SA,” says Berry Everitt, CEO of Chas Everitt International, which is the SA affiliate of Luxury Portfolio International©, the luxury face of Leading Real Estate Companies of the World© (LeadingRE).
“A unique confluence of global events, such as the economic uncertainty presented by Brexit, the flux of the Chinese economy, political unknowns derived from the race for the Presidency in the US and global threats caused by terrorism or the refugee crisis have resulted in not-surprising reports of a softening in the market, particularly in those markets that had been favoured by global buyers, like London, New York, San Francisco, Paris and Hong Kong,” he notes.
“And yet, as personal wealth continues to expand around the world, affluent people are demonstrating optimism about property alongside their caution. The survey clearly revealed that in addition to feeling good about their lives and being confident about their decisions, most of the Global Top 1% (individuals with a net worth of $3m or more) have a very strong intent to purchase more real estate.”
As for which home characteristics are most highly prized by affluent buyers, the YouGov research found that privacy and distance from other homes topped the list for 61% of survey respondents, followed by a luxury bathroom for the master suite (60%); energy efficiency and environmental design (56%); and kitchen with fitted high-end appliances (55%).
Other popular features were double walk-in cupboards off the main bedroom, a great outdoor entertainment area, an open floor-plan, a kitchen area conducive to entertaining, and proximity to shopping and services, work, school and hospitals.
In addition, Everitt says, the researchers found that affluent buyers are increasingly relying on top independent real estate companies like Chas Everitt International rather than the big corporate brands to give them what they want, which is a high level of very personalized service, a better selection of listings, and a deeper consideration for their privacy and security.
“This represents a major shift in the luxury real estate sector, especially in SA, where the market has historically been driven by the seller’s agent – and it is an important consideration for sellers when choosing an agency to market list their property. They need to be sure that it is one like ours that is continuously fostering relationships with high-end buyers that are based on personal trust and understanding.”