What qualifies as “luxury” in the residential property sector differs significantly from market to market, in terms of both price and characteristics of a home.
In its latest Luxury Defined 2015 report, Christie’s International Real Estate has attempted to frame the global luxury real estate sector, not only by examining the world’s top 10 cities for prime property, but also by analysing more than 70 additional regional markets to determine the factors at play across the luxury residential spectrum.
The real estate firm also looked at the characteristics that define luxury property today and explore which emerging markets are setting the pace for luxury tomorrow.
The research captured the collective wisdom and insights 32,000 agents operating from 1,350 offices globally – as well as and specialists from the broader Christie’s luxury goods world.
So what defines luxury when it comes to residential property?
LUXURY IS… SO MUCH MORE THAN LOCATION, LOCATION, LOCATION
Traditionally prominent addresses and prised postcodes are no longer the defining baseline concept for luxury homes. High net-worth Individuals (HNWIs) are expanding the borders of traditional luxury locales, and are willing to pay a premium in emerging luxury areas if the amenities and lifestyle offerings are right. The evolution of high-end commercial real estate is also driving this phenomenon.
LUXURY IS… CONSCIOUS LIVING
Owning a home that does not negatively affect the community – and one that can even bring positive meaning – is attractive to wealthy buyers. The demand for more sustainable and healthy environments has placed greater emphasis on knowing where and how products are manufactured, and has fuelled a trend toward conscious living.
LUXURY IS… EXPERIENTIAL
Today’s new wealthy consumers are more informed, more globally exposed, and more sophisticated than previous generations. Baby boomers in particular are now “less materialistic and more experiential,” noted Cognizent in a luxury retail trend study, and HNWIs are being led into the luxury experience by prestige brands.
LUXURY IS… CONVENIENCE
The resurgence of urban down town cores in many major cities and changing age dynamics are having a significant impact on the home-buying preferences of the world’s most affluent. As millennials grow and baby boomers transition into life as empty nesters, many larger cities are witnessing a surge of affluent older buyers to urban areas. Residents of suburban areas are also increasingly seeing a preference for urban amenities.
LUXURY IS… AGE-AGNOSTIC
Multi generational travel (trips involving at least three generations) was dubbed the biggest trend for 2014 by a luxury travel industry report. As growth in this type of tourism increases, some prestige real estate markets, particularly those in resort destinations, are seeing increasing demand for luxury homes with spaces that have the flexibility to adapt to generational diversity and entertaining requirements.
LUXURY IS… COLLECTIBLE
“For today’s wealthy investor, acquiring and holding collectibles is akin to building a store of treasure,” noted a report from Barclays’ Wealth Insights. Trophy real estate is the ultimate collectible treasure. Like buying a prized sports team or high-value artwork, trophy residences can ignite the passions of UHNWIs. Many developers of ultra-luxury properties have baked collectible concepts right into their plans with limited-edition structures and one-off creations by highly regarded international architects and designers.
LUXURY IS… TURNKEY-READY
Many buyers are willing to pay a premium for the convenience of a “just bring your toothbrush” property, outfitted with top-of-the-line accoutrements that amplify a luxury lifestyle. Brokers reported an increased interest in brand-new residences, with buyers happily paying a premium for security, concierge, and other luxury amenities.
LUXURY IS… A BLANK CANVAS
At the other end of the spectrum, some enthusiastic buyers are pushing the desire for newness to new heights. Impeded by lack of quality inventory, more and more ultra-affluent buyers wish to build their own trophy homes from scratch.
LUXURY IS… UNDERSTATED
Luxury is no longer about brash displays of wealth, noted many experts in the report. Instead, scaled-back, quality-over-quantity luxury will continue to be one of the key tenets behind many prestige property acquisitions.