Ultra-wealthy still interested in buying real estate despite slowdown, uncertainty
International investors desire investing in the United States real estate market. Surveys show that nearly 25 percent of the global top 1 percent in the United States expect to purchase new property compared with a whopping 45 percent of the global top 1 percent of the international buyers over the next three years. While homes in the higher end selling for over $1 milion based on surveys in 12 countries markets are somewhat slowing overall but hot pockets are still sizzling. With elections soon approaching consumers remain cautious yet optimistic.
In partnership with the YouGov Affluent Perspective, Luxury Portfolio International surveyed the top echelon of consumers across 12 countries, finding that the majority of those consumers were "cautious but optimistic" in the face of an uncertain and often turbulent world economy.
To be sure, the ranks of the ultra-wealthy, those with more than $50 million or more in net worth, have swelled. Research from Credit Suisse showed that there are more than 123,000 individuals in this category, a whopping 53 percent jump in just five years. Most of them reside in North America, where the rate of growth among the super-rich is double that of Asia and significantly faster than Europe's.
Although high-end real estate has softened — sales of homes priced above $1 million have tumbled recently, according to recent National Association of Realtors (NAR) figures — high-net worth individuals "feel good about their lives, are confident about their decisions and have a very strong intent to purchase real estate," the report's authors wrote.
As such, real estate is still in demand for the economic elite, but varied somewhat depending on their location.
The YouGov survey found that 25 percent of the wealthy were looking to purchase new property over the next three years, with 18 percent looking to sell. Outside the U.S., the mood was far more confident: 45 percent of wealthy buyers are looking to purchase real estate with only 23 percent looking to sell, the data showed.
The report showed that "nearly 1 in 4 of the Global Top 1 percent plans to make a real estate purchase in the next three years, with almost as many considering selling as well."
The YouGov survey is consistent with what Philip White, president and CEO of Sotheby's International Realty Affiliates, told CNBC in an interview last month. He said high-end real estate was "sort of a mixed bag, and obviously there is some slowing," but some locations were faring better than others.