According to a recent report from auction house Christies, investigating the state of the luxury property market in 2017, the world’s most expensive property can be found in Hong Kong; purchased in 2016 for an eye-watering $270 million dollars.
Hong Kong, perhaps unsurprisingly given the above, tops Christie’s chart of the leading global luxury real estate markets, ahead of London and New York, whilst only Monaco’s luxury property costs more; $5,000 per square foot, compared to $4,875 in Hong Kong. St Moritz ($3,000), London ($2710), and Cannes ($2,500), make up the top five.
Luxury property, however, means different things to different people. For some, it is all about location, whilst others value style, space, or originality.
The average cost of a luxury property when all regions of the world are taken into account, stands at $2.1 million, Christies estimates; an ever so slight year on year drop from $2.2 million in 2016.
For the first time ever, in 2016 the world’s top ten most expensive residential property sales all came in over the psychological $100 million mark, costing an average of $132 million each.
If you are in the market for a luxury property and find these numbers alarming, there’s no need to panic. $10m plus priced properties are the exception rather than the rule. In fact, there are less than 1,500 properties worldwide for sale at an asking price exceeding $20 million, and just 34 that will set you back over $100 million.
If it’s luxury “on a budget” you are after, you may need to think a little outside the box geographically, but you can own the property of your dreams for less than $1 million.
Christie’s handy guide suggests that, for $1m on the nose or a little under, you should expect 2-5 bedrooms, and a typical size of 900 – 5,000 square foot, with the smallest properties to be found in “jet set” locations like the Cote D’Azur, and the largest in suburban areas, or popular second home destinations.
Whilst obtaining a bona fide “luxury” property in, say, Monaco, will set you back at least $10 million, if you don’t mind stepping off the well beaten high end path, typically financial centres or the South of France, it is possible to purchase a property in Costa Rica, that ticks all the “luxury” boxes for less than $1 million, Christies advises.
And if Costa Rica is too far flung for your tastes, how about Canada? Toronto, Ontario, and Victoria, British Columbia top Christie’s “thermometer list”, which tracks the “hottest” luxury markets.
Away from Canadian shores, by sticking with the thermometer list, you could also consider Austin, Texas; Charleston, South Carolina; Paris, France; or San Diego, California. An enviable selection, we’re sure you’ll agree!
There is one small problem, however. In luxury property markets, you have to act fast, or risk being disappointed. The average time it takes to sell a property in Toronto, for example, is a mere 17 days, which does not leave much time for deliberation, and worse news still, the city is due to introduce a 15% tax for overseas property purchases imminently, making it a domestic buyers market.
Still there are ways around the problem – when Vancouver introduced its own overseas buyers tax, prospective foreign buyers simply began looking in neighbouring Victoria. You can’t keep a good overseas buyer down, it seems!
Or, you could try Marrakech, where, as an overseas buyer, you will be in good company. 100% of luxury property buyers are form overseas, with the majority hailing from the Arab world, with Morocco, having recently rejoined the African Union, seen as a safe haven.
Cash is no longer king
And finally, when investigating the luxury property market, you may have heard the phrase “Cash is King” repeated ad infinitum. Whilst this may have been true 5 years ago, when 80 percent of Christies top ranking property markets reported that luxury homes were acquired with over 50 percent cash or non-traditional financing, the Cash is King myth has been well and truly scotched in recent times.
Christies claims that “less than half of our top ranking markets report that luxury sales are purchased with more than 50 percent cash. Thanks to increased regulation, cash buyers are on the wane even in cities like Miami, where some 70% of all luxury homes sales were completed using cash in 2013, whilst in up and coming destinations like Toronto, low interest rates have even persuaded some glitterati to consider traditional financing. The shame!
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