Coldwell Banker Global Luxury joined forces this year with Censuswide, the Institute of Luxury Home Marketing, and Wealth-X to provide insights on the luxury real estate market and sentiments of affluent buyers.
The Trend Report 2022 was largely based on a survey conducted by Censuswide, which curated responses from over 2,000 US-based high-net-worth individuals. First and foremost, data revealed that the rich prioritise real estate as a way of maintaining and growing wealth.
80% of respondents agreed that real estate is a safe investment, and over one-third agreed that it is the safest investment when compared to stocks, bonds, cryptocurrency, and pensions.
It comes as no surprise, then, that over 75% of those surveyed already owned an investment property, with two-thirds owning two properties or more.
The top five types of homes owned by respondents were: multifamily (39%), single-family (34%), apartments (34%), townhome/duplexes (33%) and fractionally owned properties (28%).
Investors purchased real estate to diversify their portfolio (46.7%); as a long-term investment (46.1%); financial gain from rental income (45.9%), and inheritance for their children (45.3%).
High-net-worth individuals in the US are remaining steadfast in their plans to invest in property.
Almost half of the respondents who are planning on purchasing a home in the future anticipate doing so in the next one to three years, and nearly 9 in 10 respondents think that the real estate market in 2023 will be better or the same as in 2022 for investment.
It seems that current market conditions are actually encouraging many wealthy consumers to invest in real estate. Many are driven by: more inventory (42%); rising rents (38%), and the fact that stock volatility makes real estate a better hedge against inflation (38%).
In light of this, the luxury property market looks bright, with many wealthy individuals planning to acquire additional properties in the next three years.
While the market may go through periods of decline, house values tend to appreciate over time, and this will continue to bring buyers to the market. That said, investors are just as driven by a desire to diversify their portfolio and generate rental income as they are by long-term returns.
“Luxury real estate investment continues to be hot for wealthy individuals in the US and abroad. Those consumers who don’t need to move and have capital to spend will continue looking elsewhere for opportunities to grow their wealth through investments in smaller homes.” Liz Gehringer, Coldwell Banker Real Estate LLC
With a growing confidence in the market as we enter 2023, we can expect to see sustained demand and high levels of activity in real estate markets across the US.
Contact us today to discover available properties in the US and abroad.