Volume of real estate sales rose sharply in London, Miami and New York in 2013: study
by Joe McCarthy
New York Property
Luxury real estate prices remained relatively flat in 2013, but demand continues to climb in the world’s major markets, according to a report by Christie’s International Real Estate.
The luxury units sold in London rose 937 to 5,693 in 2013, while the units sold in New York rose 709 to 4, 721 in 2013. Although selling prices have not surpassed any records, asking prices are at all-time highs, indicating that brokers expect that enough ultra-affluent buyers are prowling the market.
“Many of our buyers are global buyers with homes in other markets across the world,” said Ron Shuffield, CEO of EWM Realty International, the Christie’s International Real Estate affiliate in Miami.
“This report gives us all the facts in one, concise publication which makes it easier to make direct comparisons,” he said.
The report explores the effects of dwindling inventory. Most ostensibly, luxury home listings are on the market for far less time than in the past. In New York, the average time spent on the market in 2013 was 79 days, compared to 116 in 2012 and 120 in 2011.
In London, listings remained on the market for 104 days, opposed to 120 in 2012 and 2011. Miami also saw a decline in the number of days, although less precipitous, dropping to 132 in 2013 from 140 in 2012.
London property listed by Stuart & Parker
Part of what is stoking rapacious real estate acquisition is the desire to preserve assets. Real estate is seen as a safe place to park money. Comparative values of currency weakening is another factor, according to Christie’s.
In Miami, about 35 percent of luxury homes were purchased by foreigners in 2013, while foreigners constituted 40 percent of sales in London. New York’s market is dominated by cooperative apartments, which are primarily inhabited by locals, but foreign buyers still make up about 30 percent of the market.
The New York luxury real estate market has been abuzz with surging numbers posted left and right, but will the trend continue?
Although the overall number of apartment sales rose 26.8 percent to 3,297 in the fourth quarter of 2013, the median sales price of the entire market has not caught up to the 2008 peak. Also, a wave of new variables such as new qualified mortgage rules and potentially rising interest rates could clamp what would be another year of double digit growth (see story).
Luxury buyers have become more picky, expecting homes to come equipped with bountiful amenities such as concierge services, housekeeping, on-site fitness center and spas, outdoor space and security and construction comparable to a five-star hotel, according to Christie’s
New York property listed by Douglas Elliman Real Estate
Younger buyers are a source of a growing demand for luxury properties.
Forty-three percent of younger luxury consumers are considering purchasing a home next year, compared to 21 percent of consumers over 55.
The report cites help from wealthy families, favorable interest rates and the surge in the tech sector as possible reasons for a growing millennial base.
With the varied mix of consumers scouting the market, developers have stepped up their efforts.
“Luxury product is under construction,” Mr. Shuffield said. “Developers are rushing to meet the demands of new buyers.”
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