The pandemic has many wealthy buyers redefining luxury. Intangibles such as safety, privacy and health lead the list of sought-after features luxury home buyers want, according to recent reports from Coldwell Banker and Wealth-X.
Size also matters; wealthy buyers are looking for single-family homes with office space. Second home purchases are also popular among wealthy buyers, who want privacy and security. These trends are expected to continue over the coming five years, according to “The Report,” Coldwell Banker’s annual review of and predictions for real estate trends.
Diversification and “Affluent Trailblazers”
The Report identified and named “affluent trailblazers” as a new wealth demographic. These buyers are migrating away from urban/metro areas as the pandemic piqued buyers’ interest in “hidden-gem towns,” the suburbs and second-home destinations.
Affluent consumers diversified their investments in 2020 as a method of safeguarding wealth, according to The Report—casting wider nets into real estate, stocks, art, technology, gaming and other niches. Many wealthy buyers accelerated plans to move to tax-friendlier locales amid market uncertainty and volatility.
This change in preferences also reversed the minimalist trend of the last few years, with agents reporting a resurgence in mega-mansion, private island and large estate sales among high net wealth (HNW) and ultra-high net wealth (UHNW) buyers, according to Wealth-X’s “Spotlight on the World’s Leading Markets for the Wealthy: Residential Real Estate 2021.”
Cities Remain Core to Wealthy Buyers
Wealth-X partnered with globally collaborative real estate platform REALM to research and analyze data for the report. The published information accounts for an individual’s primary and secondary residential addresses, and focuses particularly on UHNW individuals (with a net worth of at least $30 million).
Although many buyers chose to migrate their primary and secondary residences to lower population areas, cities such as New York, London, Hong Kong and Paris remain popular among the world’s luxury buyers. The report states that cities “will undoubtedly remain core to where the wealthy work and play.”
Both reports highlighted the real estate industry’s resiliency during 2020, and predicted sales will continue to grow as the economy recovers in 2021 and beyond. You can read the full reports here and here.