Christie’s International Real Estate released the Luxury Defined 2018 Report on the luxury real estate market in 2017 and anticipations for 2018. We’ve broken it down to our five findings below.
Worldwide Housing Market Ranking and Price
- With two residential sales above $100 million and the highest price per square foot of any urban area, Hong Kong ranks as the most luxurious major housing market worldwide for the second consecutive year, followed by New York and London.
- The highest priced sale in 2017 was also recorded in Hong Kong, at a staggering $360 million.
- Worldwide, the average starting price of a luxury home is around $2.4 million, with the highest price in Monaco, starting above $10 million.
Global Luxury Property Sales Growth
- Reflecting rising demands, sales of international luxury homes rebounded in 2017, recorded robust 11-percent growth. Buoyed by a revitalized global economy, stock market strength, and rising consumer confidence, property sales posted the best annual growth rate in three years.
- Million-dollar-plus homes took less time to sell in 2017 than in 2016, indicating more realistic pricing in some markets and higher demand in others.
“Hottest” Primary and Second Housing Markets
- Luxury sales in primary and second housing markets flourished. With strong year-on-year luxury sales volumes and high domestic demand, the “hottest” ranking luxury primary housing market in the world is Victoria, B.C., Canada, followed by San Diego, Calif., and Orange County, Calif.
- Second-home resort markets rallied in 2017 and into 2018 after stagnant growth in 2016; Santa Fe, N.M., is the “hottest” luxury second-home market, followed by Muskoka, Ont., Canada and Sarasota, Fla.
Trophy Homes Sales
- Only three homes achieved the $100 million-plus “billionaire’s benchmark”—as the year’s 10 most expensive homes sold worldwide for an aggregate of $1.24 billion, down from $1.32 billion in 2016.
- The average sales price of the 10 highest-priced homes is $124 million. Cities with the most sales over $50 million are Hong Kong (18 sales) and New York (seven sales).
- New-build trophy homes are increasingly a global phenomenon.
Continuous Impact of the New Legislation
- Although new taxes and foreign-buyer restrictions were introduced in several housing markets in 2017 and 2018, reflecting the continued politicization of property ownership across the globe, the new U.S. Tax Legislation may have a longer lasting impact on the luxury market—a net positive effect as the wealth of the HNW and UHNW population appreciates.
Overall, the strength of the global economy and the continuing allure of high-end properties in desirable locations indicate a strong market for the rest of 2018.