This niche Market in Minutes publication explores the Ultra-Prime Global residential market around the world. Download here.

Ultra-high-net-worth individuals (UHNWIs – those with assets above US$30m) who have several residences across the globe are key players in the world city real estate markets. The number of UHNWIs increased by 0.6% in 2012. North America saw the biggest increase in UHNWIs and now makes up 35% of the total (Wealth X).

Ultra-Prime City Residential

Savills ultra-prime world city index slowed in 2013. Annual growth to June 2013 was 2.3% compared to an average of 10.7% since 2005. The slowdown was most pronounced in ‘new world’ cities (particularly Moscow and Singapore) where annual growth was 3.6% compared to 6.3% in the same period to June 2012. In contrast, ‘old world’ cities like London, New York and Paris have shown increased growth in the ultra-prime residential sector. This reflects a continued  appetite among UHNWI ‘s for stable, safe haven assets.

In addition to the slowing in growth, the dominance of ‘new world’ over ‘old world’ cities has been reversed. Since 2005, annual growth has averaged 13.7% in the ‘new world’ cities while the ‘old world’ trailed at 7.1% growth. However, over the first six months of 2013 growth in the ‘old world’ (1.7%) has outstripped that in the ‘new world’ cities (1.0%). The change in momentum of these markets is the result of the attraction of stable and attractive assets as the ‘old world’  recovers after the global economic crisis. Meanwhile, the ‘new world’ struggles with economic and political challenges and slower growth after the boom years.

Ultra-Prime Leisure Property

Outside the cities, in ultra-prime leisure destinations of ‘billionaire boltholes’ where UHNWIs buy second homes, markets have grown faster than the cities following two years of declining value. Annual growth of billionaire leisure property outperformed our city index for the first time since 2005 at 4.1%. In contrast to city properties, the boltholes grew more strongly over the first six months of 2013 in the ‘new world’ at 8.4%. Leisure property associated with Asian cities has seen increased growth over the first half of 2013 meanwhile that associated with Sydney has fallen. This reflects an early but growing interest in non-urban property, often outside the country which hitherto has not been the priority of the ‘new world’ ultra wealthy.

Recent trends in ultra-prime leisure property continue the historic pattern of stronger growth in the ‘new world’ in comparison to the ‘old world’. Since 2005, the average annual growth has been 7.2% in the ‘new world’ whereas it was just 2.1% in the ‘old world’.

Highest prices

The record price paid per square ft at July 2013 exchange rates is No. 3 Deep Water Bay Road in Hong Kong (see Table 1). In spite of the relatively slow ultra-prime markets, new records are still found in this rarefied extreme market.

Taken from
Market in Minutes: Ultra-Prime Global Residential