luxury
Residential Blog

Luxury defined around the world

Q2 2016

Strutt & Parker affiliate, Christie’s International Real Estate, has produced its ‘Luxury Defined’ white paper, looking at which cities across the world are the places to buy prime property. We take a closer look at which cities can challenge London for the crown…

What classes as luxury?

Before we get into which city has the most luxury properties, it’s worth noting that the definition of luxury can vary from country to country and even city to city. Luxury tends to refer to both prime and ultra-prime properties.

Christie’s refers in the report to luxury properties as being valued at US$1million or above, but there are regional variations that need to be taken into account.

A survey of real estate specialists in more than 100 property markets revealed the differences in the definition of luxury. In the popular Californian desert resort of Palm Springs, luxury prices started under the US$1m threshold, while in super-exclusive Monaco it was anything over US$10m. These variations are down to a number of factors, from the local market to exchange-rate movements.

The survey also revealed that the average starting price for a luxury property worldwide is US$2.2 million – that’s just over £1.5m. To put that into context, Zoopla’s 2015 Property Rich List estimates the average cost of a home in the W8 postcode is over £2.7m.

The top ten

Now we’ve establish a rough guide for luxury residential, we can take a closer look at which cities have the top performing luxury property markets thanks to Christie’s Luxury Index.

The index rates the relative “luxuriousness” of primary market cities with at least a million residents. And while it’s no shock that London has topped the list for the past four years, there are a number of surprising cities in the top ten.

Hong Kong has been creeping up the list since 2012, where it was placed fourth. Sitting just behind London, prices continue to rise despite negative annual overall sales growth. In fact, it still managed to post the world’s top residential sale in 2015.

While the top ten contains some familiar cities like New York, which has been in the top three for the past four years, and Paris, there was also a new face in the list this year – Singapore. After several years of decline, it’s starting to revive again and managed to knock big-spending Dubai off the list.

Other notable changes on the list are the decline of Paris, which has fallen from fifth in 2012 to ninth in 2015. Miami also managed to jump a few places due to a local record sale of $55m for a new-build penthouse. This helped offset declines in overseas and cash buyers.

The new faces

As is common in the property world, new areas have become hot, especially for luxury properties. The hottest city last year was Auckland – it has seen its US$1m-plus property sales grow by a massive 63% since 2014.

This was followed closely by Toronto, which has seen sales grow by 43%. Toronto’s growth has been consistent over recent years and the city has managed to force itself into the top ten luxury cities. On Canada’s East Coast, Victoria took third place on the list, showing the Great White North is the place to invest.

The US luxury property market is booming, with San Francisco, Jackson Hole in Wyoming, and Portland, Oregon all making the list for biggest growth in luxury sales. Portland was boosted by its local tech industry, as was Stockholm in Sweden, which was tenth on the list.

In Europe, the luxury growth hotspots were Valencia in Spain, which had a boom in overseas buyers, and Costa Smeralda in Sardinia, a luxury waterfront enclave.

Read Luxury Define 2016