Many affluent entreprenuers began to look for less expensive housing last year when financial markets became unsettled.
The high-end market expanse from San Francisco to Singapore is undergoing a reality check and average home prices starting at $2.2 million slowed in 2015, increasing by 9%, half its 2014 pace. Contrary to popular belief, this decline is a reflection of stability and not weakness. London and Hong Kong housing markets are experiencing increased length of time on the market with the average home selling for 19% below asking when compared to 2014's 14% below asking price. Manhattan's sizzling housing market experienced a 5% dip last year and falling oil prices have caused Dubai's home sales to plumet 25%.
There is always a limit to massive double-digit growth and it cannot be continually reproduced for an endless number of years consecutively. While experts believe that the luxury property market is "normalizing", it still appears to be otherworldly in comparison with the conventional real estate market. Homes can be found to include cigar rooms with top of the line ventilation and climate-controlled glass wine storage space rather than your run-of-the-mill wine cellar.
Luxury squre footage varies drastically across the globe. Monterey, Mexico space can be purchased at $200 per square foot while Monaco demands $3,600 per square foot. Hong Kong's Barker Road Estate, a bit of a fixer-upper sold for $194 million and holds the record for the highest price paid for a home within the last year.
Weaker economical growth does not extend to all luxury markets. In fact, the cheaper euro has succeeded in boosting Paris pied-a-terre purchases. Last year's luxury market extended beyond global commerce and affluent resort towns and simpler tourist attractions skyrocketed in high-end sales, which will likely continue throughout 2016. Portland, Oregan has experienced a 40% spike in luxury property sales while Auckland, New Zealand's luxury home purchases increased by 63%. Film-industy-supported Atlanta, Georgia, experineced a 25% increase and a much improved auto industry initiated a healthy 17% increase for Detroit.
The Vancouver housing market has attracted Chinese expatriates and baby boomers have been cashing out and moving to Victoria resulting in a 45% increase in luxury sales. Miami Beach, Florida, experienced a 13.7% dip in average luxury home prices and Brahmins of Boston decreased by 11.8% while San Fancisco dipped 4.7% and Washington, D.C., decreased by 4.2%.
A volatile stock market aids in the further decline of luxury property sales. Such turbulence leaves luxury buyers wary of exorbitant housing expenditures, however this doesn't mean an absolute retreat from luxury housing.
If you'd like to learn more, please don't hesitate to message Lang Premier Properties online or call us at 1-855-526-4466.