Should you set a calendar by the migrating habits of the super wealthy, the year would look something like this: December is the time to jet off to the Caribbean with a visit to Barbados, St Barths or possibly the Bahamas. Sun would be followed with a spot of skiing in St Moritz, Switzerland. Then it’s down to the French Riviera for the summer months or for those who prefer a more secluded break — a palazzo by Lake Como, Italy. That’s assuming you are based in Europe. Asian expats, for example, are more likely to head to Phuket for sun and sand.
Mixed performance
Yet while the appeal of fashionable boltholes remains strong as places to visit, UHNWIs are opting for homes in big cities rather than leisure destinations when it comes to buying property. Their preference, dictated by a post credit crunch mindset and a need to remain close to centres of business, means that price growth in world leisure property has lagged behind price growth in cities.
Savills figures show that the gulf between the value of a city property and a leisure property has been widening since 2008. While city prices have risen strongly, the value of leisure property is still below its December 2007 peak. Values only stand 34% higher than they did in June 2005.
Some places have suffered more than others. In France, the threat of higher taxation reduced activity and suppressed prices. The Savills ultra-prime index shows that while prices in Paris fell 8% last year, values of UHNWI properties on the Riviera are down by 10%.
At a premium
There may be fewer buyers in the market for leisure property, but those who are still looking for a holiday home want the very best. Around Lake Como, for example, most enquiries are for homes right on the lake. Properties away from the lake are more likely to stick, especially homes that have not been modernised.
The desire to be near water is not a European phenomenon. The highest prices in Barbados are found on the west coast of the Island. Buyers want either to be by the beach or to be able to enjoy sea views. Hence, although achieved prices are still lagging behind asking prices in most places, the biggest gap is found for properties that are inland and have no ocean views. Buyers are equally demanding in the Alps and continue to seek out quality resorts with access to the pistes and within a reasonable distance from an airport or train station. The ideal home at the very top end would have a home spa, all the gadgetry and mountain views.
Strong prospects
French resorts have suffered from uncertainty surrounding fiscal tightening, while Switzerland continues to attract a global high-net-worth audience both as investors and as expats living and working in the country. Demand for Alpine property is becoming increasingly diverse with growing interest coming from Eastern Europe and Asia.
Savills expects values in leisure destinations to catch up with prices in global capitals over the next five years as UHNWIs become fully invested in cities and seek new markets.