Although we are experiencing a world of constant change and economic uncertainty, the global luxury real-estate market shines as a beacon of promise. Prime properties continue to prove to be solid investments, offering stability and growth potential even in times of upheaval. As we look to the future, both owners and buyers can anticipate a positive trajectory for the market, with expectations of rising property values in 2023 and beyond, at the highest end of the market.
Supply and demand
One notable trend that continues to persist is the growing gap between buyers and sellers in the luxury market. Available properties continue to dwindle, limiting options for buyers and creating a sense of scarcity. This imbalance in supply and demand has a direct impact on sales, as discerning consumers patiently await the perfect opportunity to secure their dream homes.
Looking ahead, 2023 will likely witness a continuation of the trend, with a persistent reduction of sellers compared to the ever-growing pool of eager buyers on a global scale. According to a recent report published on mortgage calculator website Whats My Payment, there will be more houses available on the market than potential buyers by the end of 2023. This ongoing demand will drive the exploration of new markets and accelerate the development of innovative residential projects to meet the aspirations of luxury buyers.
The growth of global wealth
As we gaze into the future, the outlook for luxury global real estate is further enhanced by the anticipated growth of global wealth. Recent reports indicate that global wealth expanded by an impressive 13 per cent last year, with robust growth expected to continue throughout the middle years of this decade. This growth in total wealth also correlates with an increase in the number of high- and ultra-high-net-worth individuals (HNWI), reaching unprecedented levels. By 2026, the millionaire level of wealth is projected to expand by 40 per cent, setting new records with a staggering 87 million HNWI worldwide. Countries such as the United States, China, UK, Canada, Australia, New Zealand, and India are at the forefront of this upward trajectory. It’s clear that a new world creates new wealth and bricks and mortar remain the most proven investments in the long haul.
The impact of the pandemic
While the immediate impact of the Covid-19 pandemic fuelled a desire for personal space when it comes to luxury buyers and investment the world’s leading and more influential cities remain the most sought after. This renewed interest in city living bodes well for prominent urban hubs such as New York and London, which have demonstrated remarkable resilience in their recovery from the pandemic’s upheaval.
The resulting dynamic is expected to accelerate the pace at which investment properties are snapped up. Consequently, we can anticipate an upward surge in home prices for luxury properties in city centres. Luxury buyers are drawn to city living for its multifaceted benefits, including easy access to shopping destinations, restaurants, nightlife, and the allure of shorter commutes. They also prioritise premium education with many of the most esteemed and prestigious private schools located in the big cities. The city has made a triumphant return to the forefront of luxury living, dispelling any lingering worries about the city exodus.
The rise of the ‘Super City’
Many countries are now investing and looking to further define their leading most high-profile cities, to attract investment. An emerging trend is the rise of super cities as lucrative investment opportunities. These metropolises, often referred to as global or alpha cities, possess a magnetic allure that transcends borders and attracts both investors and buyers. Super cities are emerging across UAE and Asia and beyond to compete with the established London, Paris, and New York, where economic growth is accelerating, and luxury markets are being created.
Property within these super cities holds immense potential for long-term gains with more and more individuals gaining access to the HNWI club at a faster rate. Super cities offer a diverse range of investment options, including luxury residential properties, commercial developments, and mixed-use projects. Luxury apartments with stunning views of iconic skylines, penthouses in prestigious neighbourhoods.
The future of global luxury real estate is brimming with potential and opportunity. However, it’s crucial for investors to conduct thorough market research and use the tools available such as platforms like Whats My Payment, engage reputable professionals, and stay updated on emerging trends. With positive projections for 2023 and beyond, the market is set to flourish, catering to the tastes of buyers who seek quality, exclusivity, and the promise of long-term value appreciation. The trajectory of global wealth and the growing number of high-net-worth individuals further bolster the outlook for luxury property, reinforcing its position as a sought-after asset class.
