Luxury homes are top wealth indicator say HNWIs

Owning luxury real estate is considered a top indicator of wealth among high net worth individuals.

A survey of some of the world’s wealthiest people has found that the desire to buy high-end homes remains strong although supply may be an issue.

The Luxury Portfolio study reveals that 35% of HNWIs view real estate as the most obvious indicator of wealth with those in Europe and the Middle East feeling the strongest association between wealth and real estate.

Interestingly, wealthy homeowners in North America have a different top priority for buying their current home than those elsewhere.

While around 4 in 10 respondents in Asia, Europe, and the Middle East, cited a strong emotional connection to a home as their main purchase decider, that was important for just 20% of North Americans.

In this region, wealthy homebuyers are more concerned with the lot, location and size of the home was a bigger concern.

But even in those regions where emotions outrank more material consideration, there is one overwhelming factor influencing buying decisions.

"Despite this emotional connection, 85% of wealthy buyers consider the purchase of real estate a rational choice," said Stephanie Anton, president of Luxury Portfolio International®. "Real estate signifies success for these buyers, both internally and externally to their peers."

Stephanie Anton

The survey shows that 40% of buyers said improving their quality of life was their top reason for buying a personal residence.

Are your clients likely to be buying or selling?
Looking at the next three years, 38% of respondents said they intend to buy luxury real estate, while just 23% expected to be selling.

That mismatch keeps the luxury market globally favouring sellers but nowhere more than in Asia where 68% want to buy and just 18% are selling.

Overall, 59% of luxury buyers prefer urban locations. North American was the only region where suburban locations were slightly more popular (46%).

"We are pleased to see that as we watch wealth grow among the top 10% of consumers globally, so too do we see continued interest in, and appetite for, luxury real estate both as a financial as well as an emotional investment," added Anton.