Ski destinations such as the Alps and Aspen and second home markets such as Malibu and the Caribbean also have emerged as top ultra-prime markets
Mumbai, December 12, 2018: For India’s wealthy; the top preferred markets are the United Kingdom, USA, UAE, Singapore and Canada. As per the latest survey by global real estate consultancy Knight Frank LLP, Hong Kong tops the ranking for the greatest number of sales in the ultra-prime residential market worldwide, with the highest number of transactions worth US $ 2.5 billion achieved in the last 12-month period ending August 2018. It was also the most expensive ultra-prime market, with an average price of US $52.8 million paid. New York and London took the second and third place, respectively.
Knight Frank has launched the first-ever assessment of the global ultra-prime residential market, analysing sales over US $25 million around the world. According to the research, the top six ultra- prime city markets of Hong Kong, New York, London, Singapore, Los Angeles and Sydney reported 153 transactions above US $25 million in the 12 months to the end of August 2018 with a combined value of US $6.6 billion. The combined transaction levels in these cities grew by 12% in the two years since 2016 with growth set to continue.
| Total value of transactions (US$ million) | ||||
| 2015 | 2016 | 2017 | 12 months to August 2018* | |
| Hong Kong | $1,831 | $1,646 | $2,679 | $2,481 |
| New York | $1,026 | $1,723 | $1,627 | $1,497 |
| London | $2,881 | $1,713 | $1,563 | $1,479 |
| Singapore | $175 | $131 | $146 | $529 |
| Los Angeles | $201 | $718 | $660 | $441 |
| Sydney | $195 | $123 | $221 | $219 |
| Number of transactions | ||||
| 2015 | 2016 | 2017 | 12 months to August 2018* | |
| Hong Kong | 37 | 30 | 47 | 47 |
| New York | 28 | 50 | 42 | 39 |
| London | 72 | 36 | 37 | 38 |
| Singapore | 4 | 2 | 5 | 12 |
| Los Angeles | 5 | 16 | 18 | 12 |
| Sydney | 6 | 3 | 6 | 5 |
| Average transaction value (US$ million) | ||||
| 2015 | 2016 | 2017 | 12 months to August 2018* | |
| Hong Kong | $49.5 | $54.9 | $57.0 | $52.8 |
| Singapore | $43.6 | $65.5 | $29.1 | $44.1 |
| Sydney | $32.5 | $41.0 | $36.9 | $43.8 |
| London | $40.0 | $47.6 | $42.2 | $38.9 |
| New York | $36.6 | $34.5 | $38.7 | $38.4 |
| Los Angeles | $40.2 | $44.8 | $36.7 | $36.7 |
Sales in the ultra-prime segment of six global cities
* Data to the end of August 2018
Notes: Los Angeles data excludes Malibu. All data relates to that which is reported and may not cover all transactions in the market place
Source: Knight Frank Research, Douglas Elliman, LonRes, HM Land Registry, Memfus Wong Property Information Centre, REALIS
Liam Bailey, global head of research at Knight Frank commented, “The relentless creation of private wealth globally over the past decade has fuelled the growth of ultra-prime residential markets. Knight Frank has assessed the world’s leading luxury markets to reveal 17 true ultra-prime destinations. In addition to identifying the existing top-tier markets globally, we have also detailed those markets, which are on the trajectory to join the ultra-prime ranks – led by locations like Dubai.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “The propensity of global business destinations also being the ultra-prime home locations can be attributed to the continuous wealth creation in these cities. These are also global headquarters of multinational corporations, home to the Ultra HNIs and global citizens of varied vocations.”
In India, an analysis of the trends in the last three years indicates that the UK, USA, UAE, Singapore and Hong Kong were the most preferred markets by the Indian wealthy. The recent studies highlight that the number of demi-billionaires, those with US $500 million or more in net assets, will rise by a staggering 70% from 200 in 2017 to 340 in 2022. Subsequently, the rise in the number of Indian demi-billionaires will propel outbound investments in key residential destinations of global significance. In 2018, the top preferred markets are UK, USA, UAE, Singapore and Canada. The inherent reasons for these markets could range from being a top global city to a second home destination or a ski resort destination.
Knight Frank’s Wealth Report 2018 highlights that the global ultra-wealthy population (US $50 million+ in net assets) grew by 18% in the five years up to 2017 and is forecast to increase a further 40% over the next five. This growth is likely to mean transactions at the ultra-prime end of the market will continue to increase and spread to more locations. Other cities such as San Francisco, Chicago, Dallas, Beijing and Shanghai may soon rise in the rankings and second home markets such as Sardinia, Portofino and the French Alps are also likely to see more activity at this level.
Shishir Baijal added, “The rise of the Indian Ultra wealthy population and their inclination for owning ultra-prime property globally resonates well with the strong trend of increasing outbound investment from India. While this investment is finding way into key residential destinations globally, it also presents a unique opportunity for top Indian markets like Mumbai and Delhi that are bound to benefit if they create a comparable product for such demand.”
The research stated that second home markets such as Malibu, Palm Beach, Cote d’Azur, Monaco, the Caribbean and ski destinations such as the Alps and Aspen are among the top 17 locations for ultra-prime sales with the majority witnessing an uptick in sales volumes over the past three years. Paris and Miami complete the line-up of city markets.
Globally, our in-depth analysis found that the ultra-prime market in New York grew by 50% between 2015 and 2017. It sits in second place in terms of number of transactions achieved in the past 12- months (worth US $ 1.5 billion). On the other hand, London topped the rankings in 2015 with the highest number of transactions (worth US $ 2.9 billion) but slipped to third place in the most recent 12-month period. Higher stamp duty charges and concerns over Brexit have led to a decline in the number of ultra-prime sales. However, the city remains one of the top three ultra-prime markets.
Further, Singapore saw the number of ultra-prime sales drop to two in 2016. However, this bounced back to 12 in the most recent 12-month period, demonstrating the underlying health of the market, while LA has seen significant growth in this market with the number of transactions growing by 260% between 2015 and 2017, albeit from a low base.
Knight Frank’s Wealth Report 2018 highlights that the global ultra-wealthy population (US $50 million+ in net assets) grew by 18% in the five years up to 2017 and is forecast to increase a further 40% over the next five. This growth is likely to mean transactions at the ultra-prime end of the market will continue to increase and spread to more locations. Other cities such as San Francisco, Chicago, Dallas, Beijing and Shanghai may soon rise in the rankings and second home markets such as Sardinia, Portofino and the French Alps are also likely to see more activity at this level.
Corporate Comm India(CCI Newswire)
