As the global economy continues its recovery, record sale prices of luxury goods and luxury homes continue to capture headlines and intrigue the buying public around the world. What we are seeing in our current market is that $100 million is now the benchmark for this ultra-exclusive category, as more consumers move to collect “trophy” properties. More properties above $100 million were listed in 2014 than ever before.
As the number of wealthy individuals rises, inventory in coveted markets is dwindling and extravagance is spreading to new areas. A thriving real estate market tends to have a cascading effect across the luxury sector, with consumers turning to other categories after a property is secured. Location, lifestyle, and provenance, particularly at the top end of the luxury residential real estate market, are the hallmarks of value and often equally as important as price when high net worth individusals consider a property purchase.
The traditional luxury market has often been pegged at $1 million and higher, according to Christie’s. The ultra-affluent, however, regularly escalate the benchmark. London and Beverly Hills, CA have the highest entry-points with luxury homes starting at $6 and $8 million, respectively. High-value urban market sales rose 15 percent from the year-ago period, largely because of millennials growing up and baby boomers transitioning into new phases of life.,Cities are still performing strongly, not at the levels we saw in 2014, but we expect 2015 to see sustained, healthy growth from major economic hubs. Second home markets led the growth of high-value sales in 2014,
As the global affluent continue to thrive, markets everywhere will rejuvenate.