PERSPECTIVES ON THE AFFLUENT CONSUMER & THE LUXURY REAL ESTATE MARKET 2016 WAS AN UNPRECEDENTED TIME FOR THOSE WHO MARKET SIGNIFICANT PROPERTIES. As we reflect on this past year, it was a unique confluence of global events that took place, including the economic uncertainty presented by Brexit, the flux of the Chinese economy, global threats caused by terrorism and the refugee crisis and political unknowns derived from the race for the Presidency in the United States which all resulted in not surprising reports of a softening in the market, particularly in those markets that have recently attracted global buyers, like London, New York, San Francisco, Paris and Hong Kong. Our perseverance to gain the latest knowledge through our partnership with YouGov Affluent Perspective reflects a healthy environment for personal wealth. Today’s affluent are cautious, but optimistic. The highest-net-worth among us feel good about their lives, are confident about their decisions and have a very strong intent to purchase real estate. This is a group of successful individuals who know what they want, are driven by passions, are interested in keeping their families and loved ones safe, and embrace the latest innovations, particularly in technology and sustainability. With confidence and innovative thinking comes a consumer who increasingly prefers strong, independent brands. From the perspective of Luxury Portfolio International,® a collection of market-leading, local, independent real estate brands in the world, that’s terrific news as we begin a new year. Real estate is a 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 can be an investment in, and reward for all their hard work. At Luxury Portfolio, we constantly strive to better understand the drivers and motivations of those with significant means. The following segment of the report is a terrific snapshot of just some of our latest findings, in concert with our research partner, YouGov. REAL ESTATE DEMAND FROM THE WEALTHY Over the next three years, we can see the demand for purchasing exceeds the demand for selling both in the U.S. and globally. The result may be a mix of a sellers’ market or a boom to the new construction market. Within the U.S., 25% of the wealthy are looking to purchase, with 18% looking to sell. Outside the U.S., 45% of the wealthy are looking to purchase, with 23% looking to sell. Regardless, nearly 1 in 4 of the Global Top 1% plans to make a real estate purchase in the next three years, with almost as many considering selling as well. The market for sustainable living technologies is more vibrant than ever with the majority of global wealthy committed to sustainable living. Whole-house energy solutions that start with sound construction decisions have gained the most traction. Closely following is the convenience promised by mobile devices. The ability to remotely adjust temperature throughout the home, or control lights, window shades and small appliances, makes living in the home as energy efficient as possible. SUSTAINABLE LIVING IS ONE OF MY CORE VALUES | % AGREE CHARACTERISTICS SOUGHT IN A HOME When it comes to the home, wealthy consumers are motivated by intrinsic qualities of the property including privacy, proximity to shopping and services, work, hospitals and schools, and refined finishes such as highend kitchen appliances and a luxury bathroom for the master suite. WHICH OF THE FOLLOWING TECHNOLOGIES ARE YOU LOOKING FOR IN YOUR NEXT HOME? U.S. WEALTHY HAVING A "SMART HOME" IS VERY IMPORTANT TO ME | % AGREE Advanced in-home technology for home security is quickly becoming an important distinction for wealthy consumers. Safety and privacy have always been concerns, but today’s fully digital security systems that feature monitoring (video) and intervention (ability to lock or unlock doors) are increasingly important.
Published by Luxury Portfolio Int. View All Articles.