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Global Luxury Property Review

April 2013

Luxury property market driven by

scarcity and foreign buyers Limited inventory, strong

international buyer demand, and

high net worth individual’s

increased appreciation for world

class lifestyle offerings have pushed

prices for luxury homes toward

historic highs, a new study shows.

The research from Christie’s

International Real Estate compares

the world’s top property markets

including London, New York, Hong Kong, Paris, San Francisco, the Cote d’Azur,

Toronto, Dallas, Los Angeles, and Miami, to produce the firm’s first global indicator

for luxury residential real estate.

The Index ranks markets across key metrics including record sales price, prices per

square foot, percentage of non-local and international purchasers, and the number of

luxury listings relative to population.

It shows that globally, top tier property sales achieved record prices in several cities,

remaining immune to many of the economic concerns that drive the general housing

market and that HNWIs are often more inclined to invest in an important global

market than in another city within their home country for second or additional homes.

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It found that prestige residential real estate values will more likely follow growth

trends of non consumable luxury goods such as fine art more so than the growth

trends of the general housing market.

It also shows that cash transactions have dominated luxury property acquisitions

across many cities but recent tax law changes in many of these markets are expected to

negatively impact on market activity in 2013.

‘With financial markets providing a limited return on investment, high net worth

individuals are recognising the intrinsic value of investing in non-consumable assets

such as prestige real estate and fine art,’ said Bonnie Stone Sellers, chief executive

officer of Christie’s International Real Estate.

‘Strong momentum in the luxury property market is also being driven by scarcity of

quality inventory and demand from international buyers in many of the world’s top

destinations,’ she added.

London topped the index for the highest home sale price at $121 million followed by

New York at $88 million the Côte d’Azur recorded the highest percentage of both

secondary home buyers, 95%, and international and non-local buyers, 90%.

‘Ultra high net worth individuals with significant cash on hand, such as many of our

Russian clients, are not afraid to invest in Côte d’Azur real estate despite recent market

volatility,’ said Niki Van Eijk of Christie’s International Real Estate affiliate Michaël

Zingraf Real Estate in Cannes.

‘These multi millionaires and billionaires are still keen to purchase property in the area

for leisure purposes. They do not purchase these homes in order to flip their

investments, rather they may purchase a spectacular home in Cannes or Cap Ferrat to

enjoy the region’s wealth of available cultural and leisure pursuits,’ explained Van Eijk.

Toronto’s real estate market, which has remained buoyant in recent years of global

turmoil, recorded the lowest amount of days on the market for luxury listings at 46

days. However, the report says that this trend began to reverse in the second half of

2012 and the number of days on market is expected to lengthen in 2013 as a result of

the implementation of new restrictions on mortgage financing intended to cool the

housing market.

Part of the success of the Miami market in 2012 was fuelled by South American buyers

concerned with their own local economic conditions. ‘International buyers, in

particular have been purchasing Miami property as a result of uncertainty in their

currencies, which have often been devalued against the US dollar,’ said Ron Shuffield

of Esslinger Wooten Maxwell Realtors, the Christie’s International Real Estate affiliate

in that city.

Source: PropertyWire

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Billionaires property buying spree

Global billionaire activity in world real estate markets has been so intense over the last

seven years that it has led to a doubling of property values in this sector, says

international real estate adviser Savills, in its latest World Cities Review.

Although overall, aggregated world values did fall somewhat after 2007 and price

movements seem relatively volatile, recovery has been significant since 2009 so

billionaire markets have exceeded the growth seen in mainstream markets of the same

world cities.

It has been rising commodity prices and the creation of new, ultra-rich classes in China

and Asia that has precipitated the highest growth in ultra-prime real estate values.

Singapore and Mumbai stand out as having seen the highest growth in ultra-prime

values since 2005 (at 232% and 176% respectively). Both grew from a relatively low

base while the highest overall values are seen in Hong Kong.

Cities in newly emerged economies have significantly outperformed those in the ‘old

world’ economies of the US, Japan, Australia and Europe. Only London’s ultra prime

market stands out among the ‘Old World’ cities as having shown significant growth

since 2005, totalling 107%. New York’s billionaire real estate stands only 47% higher

and Tokyo ultra-prime residential is only 8% more expensive (in local currency) than it

was in 2005.

Source: Savills

Other luxury property news:

London luxury price rally to slow down, Grosvenor

Grosvenor Group Ltd., the real estate company owned by the Duke of Westminster’s

family trusts, said it’s looking to buy rental properties for middle-income tenants as

London’s five-year luxury-home boom may be ending.

Grosvenor will target rental-home purchases because the value of luxury properties

may climb at a slower rate, Chief Executive Officer Mark Preston said in a telephone

interview today. The London-based company may partner with pension funds in the

investments, he told Bloomberg Businessweek.

Source: Bloomberg

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Strong luxury home sales Q1 of 2013 for Las Vegas

Kenneth Lowman of Luxury Homes of Las Vegas reported strong luxury home sales in

the first quarter of 2013 for Las Vegas and Henderson, Nevada. There were a total of 54

luxury homes sold at or over $1 million in the first quarter of this year. This compares

to just 33 luxury homes sold in the first quarter of 2012. Just five of the fifty-four sales

were distressed or bank owned sales, just under 10% of the total.

Source: SFGate.com

Dubai luxury property up 9%

Real estate experts Cluttons has said average prices for high-end villas in Dubai are up

by nearly 9% over the past six months.

Cluttons said luxury villa prices have increased on average by 8.9 percent between Q3

2012 and Q1 2013, while mid-range villas have experienced gains of 14.9 percent over

the same period.

Source: ArabianBusiness.com

UK residential property prices up 1.9%

Residential property prices in the UK increased by 1.9% in the 12 months to the end of

February 2013, the latest data from the Office of National Statistics shows.

Source: PropertyWire

More searching for overseas property location, report

More than half (51%) of overseas property locations saw an increase in search activity

in March 2013, according to the latest monthly report from Rightmove Overseas. With

notable increases in search activity seen for Cyprus, Madeira and Turkey.

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About Butterfly Residential

The Global Luxury Property Review is a monthly article compiled by Butterfly Residential offering a snapshot of the

sector. Butterfly Residential is a boutique, professional, high-end property company specialising in sales and rental of

luxury property Marbella, London and Barbados, among others. Butterfly Residential is headed by Edward Fairless

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Address: Avd. Ricardo Soriano 72, Edf. Golden, Portal C, 2º H, 29601 Marbella, Málaga, España

Email: info@butterflyresidential.com Web: http://butterflyresidential.com

Tel: (+34) 662 258 896 Tel: (UK) 0208 1444 383 Skype: butterflyresidential