Adaptation is the key to luxury real estate going into 2023, according to Luxury Portfolio International's latest report, The State of Luxury Real Estate.
‘The panorama of the “COVID boom” is clearly behind us,’ says Mickey Alam Khan, president of Luxury Portfolio International. And with the dust now settling, so too is the market, Mickey adds, ‘with the latter half of 2022 ushering necessary market stability into 2023 and beyond.’
According to Luxury Portfolio International’s newly released State of Luxury Real Estate (SOLRE) 2023 report, affluent home buyers are moving past, and working with, pandemic shifts in the market, thinking long term and city center for their next purchases.
Affluent consumers appear to be leaning into the new real estate environment, according to the 2023 SOLRE report, which is based on a survey of nearly 3,000 individuals in the top five percent income in 28 countries.
‘Adaptability is the defining spirit of buyers currently, and confidence is its currency,’ adds Mickey.
‘The worldwide wealth outlook is positive over the next five years. Breakout growth among ultra-high-net-worth individuals is creating a global upper-middle class.’
Luxury home buyers — those who plan to purchase a home at $1 million or above in the next three years — are ‘aware of the potential headwinds,’ as Mickey explains. But whether these come in the form of local economic conditions, the fragmented political landscape of climate change, buyers are still ready to trust themselves to make decisions and go ahead with their purchases.
‘Owners and buyers expect values to rise in 2023 and investment-property purchase expectations remain at 2022 levels,’ Mickey concludes. ‘Luxury real estate remains a solid investment in a time of upheaval.’
The report includes three main sections: behaviour, mindset and trends.
Behaviour takes a look across the world at the various luxury real estate markets — with New York, Beijing and Singapore the hottest places right now — as well as looking at the new luxury markets which emerged in the wake of the Pandemic, such as Harrison, Idaho, and College Grove, Tennessee.
The mindset section takes a fascinating look at how buyers think about their property purchases, finding that 89% admit that their instincts are now their primary guide in decision making, with gut feelings validating decisions that have already been quantified rationally.
Finally, the trends section of the report looks at how buyers are thinking right now, concluding that they’re looking for places that are both solid investments and surrounded by natural beauty — and city centre homes are still hugely sought-after. It’s also fascinating to see that over 50% of luxury property buyers in the 18-49 age range are still happy to buy a house purely after a virtual tour.
Key Findings from The State of Luxury Real Estate report
Luxury Residential Real Estate Market Behaviour
- The Affluent Housing Shortage Continues
- Luxury Residential Market Establishes New Normal
- Asia-Pacific Affluent Expressing Pent-up Demand for Housing
- Europeans Remain in a Post-COVID Slump
- South America Has Strong Intentions Despite Economic and Political Shifts
- North America Is Bullish on Luxury Real Estate
- Buyer Insight: Tenure with wealth
- A Long History of Living With Wealth and Affluence
- Buyer Insight: In tune with themselves
- Trusting Their Instincts
- Living Their Values: Recreation Activities Align With Priorities
- Buyer Insight: A life well-lived
- Intensely Happy by Design
- Personal Well-being Activities Are Remarkably Consistent Globally
- Sustainability Is an Element of Well-being
- Inspiration Is the Most Potent Form of Social Well-being
- Ready to Entertain at Home Again
- Large-scale Events Regaining Popularity
- Confidence and Spending
- Confident for a reason
- Wealth Creation Continues at a Historically High Pace
- Personal Financial Outlook Is Healthy
- Luxury Home Buyers Are Alert to the Realities of the Day, but Are Not Troubled by Them
- Spending remains healthy
- Spending Intentions Are High Between 2022 and 2023
- Luxury Spending on Home Goods Expected to Rise During the Holiday Season
Buyer Trends in Luxury Real Estate
- Buyer motivation
- Consumers Are Prepared to Act, and Buyers are Motivated
- Fear Keeps Many Potential Clients Out of the Market Entirely
- Sound Investment is the Top Priority in 2023
- Quality investment
- A Difficult Investing Year Spurs a Return to Quality
- Luxury Investment Properties Are On-trend
- The City Center Remains the Most Desirable Address
- Next home features
- Focus is Shifting from Shared Walls to Single-Family Homes
- In It for the Long Haul
- Purchasing trends
- Financing: Cash Is No. 1, But It Is Complicated
- Next-gen Buyers Are Open to Virtual Buying Opportunities
- Use of Online Agency Appeals to Next-gen Buyers
- Buyer motivation
Mickey Alam Khan, President of Luxury Portfolio International, shares his views on the latest in the international property market leaned
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