Luxury real estate world and agents

Luxury real estate world and agents: the 2017 guide

In this article, we will talk to you about the world of luxury real estate, but let’s make a small introduction. We are used to thinking of the house, and this above all for an all-Italian or at most Mediterranean heritage, as a good refuge for families, a much-desired place that welcomes us when we return from work, warm and relaxing, that has everything we need. To make our children grow better.

It is also legitimate, considering each one with their own bank account and spending potential, to imagine their own home equipped with comfort and, why not, even luxury elements, although those who are really used to investing in prestigious properties may prefer as home to a second or third home, exclusive places such as New York, London, Singapore or Hawaii. 

In fact, today’s tycoons and large investors no longer seem to want to consider the home as a place to live permanently, but often, also due to the frenetic pace of work, they are found at home in the most disparate areas, and usually more exclusive, of the planet. Therefore, a good real estate agent in the luxury sector should first ask himself what the meaning of “home” really is for a client like a Russian, American or Asian billionaire, before thinking about selling him exclusive villas in Italy.

The “home” in luxury real estate

Exactly, what does “home” mean for these customers, in your opinion? Does the definition we can assign come remotely close to what we, our parents and our grandparents have always had? Personally, we think that in recent years this concept has been distorted and that today’s millionaires are looking for much more than a place when they are looking for a property, they are looking for a lifestyle. What I’m looking for is nothing more than a personal definition of living well, and it makes little difference where in the world they are: what a licensed real estate agent who deals with prestigious properties should do, and know how to do well, is nothing more than proposing the “luxury” lifestyle that is next to a luxury property.

This is why attention must be paid not only to the property itself but to everything that surrounds it, even several kilometres away: from the airport to local roads, to infrastructures, to exclusive shopping and entertainment centres. , to good food. Isn’t all this luxury after all? Doesn’t all this give a decisive added value to the property, in the eyes of a millionaire looking for a second home?

After having told you about the concept of luxury in today’s real estate world, let’s give some numbers and see which cities in the world are most chosen by international investors as a place to buy their luxury homes.

The ranking of the most expensive cities in the world

If you think that the prices of luxury homes in the city where your real estate agency is based are high, then hold on tight and get ready to find out which are the most expensive cities in the world and the average prices of elite real estate. Here is an overview of the first places in this special ranking that we have collected by rummaging through the web archives of the main real estate newspapers: we start from the most distant corners of the Earth to finally get to what interests us most, the Belpaese.

Those very far from here

Hong Kong is confirmed as the protagonist of an unstoppable escalation, ranking second among the most expensive cities on the planet. In the Asian country, which among other things is the city with the highest percentage of billionaires in the world, the average price of luxury residences is around 43,500 euros per square meter.

A respectable position (a sixth most expensive city in the world) also for Singapore, a city-state in Southeast Asia that even follows New York, placing itself in fifth place with the very respectful average of 22,300 euros per square meter. Like Hong Kong, it has been the subject of growing interest for international investors in recent years, despite the Achilles’ heel of very high taxation.

Let’s now make a detour to Oceania. Sydney, the most populous city in Australia which now has 5 million inhabitants, is in the seventh position in this special ranking, and the purchase of a luxury property can be completed with an average price of 21 thousand euros.

Do you think that China does not place any city among the most expensive ones? You are wrong! There are two cities in the most populous state in the world (currently 1.375 billion people) to appear in the prestigious areas of the ranking. Shanghai is, not surprisingly, the most populous city in the People’s Republic of China and in the world, with about 45 million inhabitants, and is in the eighth position with an average of 18,000 euros per square meter for high-end properties. Note of merit also for the capital Beijing, where the average cost for an apartment is 14 thousand euros.

The United States is still among the most popular destinations for investors in luxury properties, and it is no coincidence that three of the most expensive cities appear in the ranking. As anticipated, New York is fourth, where the average cost of a luxury home is around 25 thousand euros per square meter. Moving from the East to the West Coast, Los Angeles comes in tenth with an average of 15,000 euros per square meter. Same quotation as the California metropolis for the third of the stars and stripes cities present in this ranking: it is Miami (Florida), where the Miami2020 urban project is expected to contribute to further increasing the prices of luxury properties in the coming years.

Those in Europe

Let us now cross the ocean and come to the Old Continent. Among the European capitals, at the top of the ranking and very popular with millionaires looking for investments in the brick, we can only find the “great classics”: London is in third place in the world among the most expensive cities, with prices around 41,400 euros per square meter.

Only ninth place for the French capital Paris (17,400 euros per square meter), which continues to maintain an exceptional artistic appeal, despite having now been overtaken by the main metropolises of China and Southeast Asia.

As we get closer and closer to Italy, it is just a stone’s throw from the border that we find two great surprises. Geneva is even on a par with Singapore, with a price per square meter of luxury properties equal to around € 22,300.

According to ” Knight Frank’s latest Wealth Report 2015 “, the Principality of Monaco wins the ranking of the most expensive city in the most elite range of properties sold by real estate funds and large investors. Thanks to the super-facilitated taxation and the very high standard of living, the Monegasque capital leads the ranking with an average of about 51 thousand euros per square meter, and the peaks are recorded in the area adjacent to the casino.

Those in Italy

Even if Italy cannot boast placing in the high positions of this ranking, let us pause in any case to analyze the prices of luxury homes in the two main cities of the boot or those where prices are the highest. In Rome, the average prices of properties of this type range from a minimum of 12 thousand to a maximum of 20 thousand euros: among the most expensive areas we find the historic centre, the Parole, Piazza di Spagna.

We can say that art still continues to pull (and attract investors) more than fashion, finance and design, in fact in Milan the prices of luxury properties are on average “only” 10,500 euros per square meter. But the peaks recorded in the last period bode well for imminent growth: recently the Trivulzio building in via della Spiga was sold for 37 million euros, that is 37,000 per square meter, a true record figure. Among the other highly rated areas, we mention Brera, corso Venezia, corso Magenta and via Monti.

Southern Europe (and Italy) in the lead in luxury

We conclude the roundup with a report from the authoritative LuxuryEstate.com portal , which in 2016 compiled a ranking regarding searches for luxury properties worldwide on its web platform. It emerged that the most sought-after destinations by large investors are Southern Europe, with an average figure set by users on the search criteria of approximately 3.2 million euros.

Among the first fifteen countries to have received the highest number of requests, Spain stands out, capable of collecting even 30% more searches than in 2015, followed by France and Portugal. Fourth place for Italy, with an increase of 5% compared to the previous year and an average spending budget for a luxury property of around 2.2 million euros. At the wheel of the Belpaese we find the first extra-European, the United States, while the United Arab Emirates, Great Britain, Austria, Switzerland and Turkey are also well positioned in the luxury real estate world.

Conclusion

Numbers often leave the time they find and turn out to be only useful material for making healthy conversation with some colleague or client, thus enriching the mutual baggage of known notions and curiosities. But we think that knowing in depth the luxury real estate world and the psychology behind it can be a valid support for an agent who wants to position himself in the difficult niche of the luxury real estate market. 

So understanding why today’s rich people prefer to shop in certain cities over others can provide you with fundamental guidance to more appropriately and specifically target your marketing and advertising efforts. Remember that what you are selling is not only real estate but also, and sometimes above all, a real lifestyle.

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