A report published by Christie’s International Real Estate shows that luxury home sales worldwide grew by 11 per cent in 2017.
Christie’s International Real Estate is a leader in worldwide luxury property sales and is recognised as an authority on market trends. The company produces an annual report, called “Luxury Defined,” on the luxury residential market, consolidating findings from 138 affiliated brokerages in 46 countries.
In addition to quantifying the growth in worldwide luxury home sales, the “Luxury Defined 2018” report also indicated the second home market has rebounded following stagnant growth in 2016. That growth is fueled largely by the world’s high-net-worth and ultra-high-net-worth-individuals, more than half of whom own two or more properties.
The increase in worldwide luxury real estate sales has been attributed to several factors, including a strong global economy and stock market, rising consumer confidence and low interest rates. The uptick in the pace of sales has not been without challenges, most notably natural disasters that occurred across the globe in 2017, as well as currency risks and devaluations in some jurisdictions, and new government taxation on foreign buyers in some previously hot-selling markets.
Shifting demographic market patterns are also influencing the luxury real estate market, particularly in the second home segment, as affluent baby boomers retire in recreation-rich communities and affluent older millennials choose to telecommute in order to balance work with their recreational interests.
Looking ahead to the second half of 2018 and beyond, the global luxury real estate market is poised to be influenced by three trends:
Star architects will become almost a prerequisite for high-end residential developments, meaning that buyers will look beyond the design and floor plans to the inspiration itself.
Inventory constraints in key product areas will continue to be a challenge for both buyers and sellers, particularly at the entry level luxury tiers. Supply in key markets will not keep pace with demand, resulting in active listings selling faster than in previous years.
Natural disasters, geopolitical uncertainty and terrorism fears in some countries prompted affluent buyers to consider new locales for secondary residences in 2017, which may prove to have a lasting impact on the second home market. These buyers will seek destinations with well-developed infrastructure to cope with natural disasters and a sound regulatory and political environment.
The Cayman Islands real estate market is positioned well to take advantage of the luxury real estate market trends. New projects such as The Residences at Seafire offer the “starchitect” appeal and solid construction that Cayman Islands buyers increasingly request. The country’s reputation as a well-regulated British Overseas Territory with a respected judiciary and low crime rate add to the appeal of the Cayman Islands as a place to own either a primary residence or second home.
Provenance Properties Cayman Islands is the exclusive affiliate of Christie’s International Real Estate in the Cayman Islands and is a member of the Cayman Islands Real Estate Brokers Association. Provenance Properties sales executive Ruth Gustafsson agrees with the findings in the Luxury Defined report produced by Christie’s, but notes another trend in the Grand Cayman market.
“We are having excellent success with our resort residential luxury real estate portfolio,” she says. “Demand for our listings at The Ritz-Carlton, Grand Cayman continues and we are receiving more inquiries for The Residences at Seafire as new buyers to the island search for resort-style properties with a rental programme option.”
To download a copy of “Luxury Defined 2018,” please visit www.christiesrealestate.com/luxury-defined.