The living habits of ultra-high-net-worth individuals (UHNWIs) are different from those of others and one such habit is to own multiple homes.
The UNHWI Luxury Real Estate: Multi-Homers Report, produced by Wealth X and Sotheby’s International Realty®, explores the demands of UHNWIs when purchasing a second or third home and the top destinations in which these homes are located – usually away from the commonly popular urban hubs of London, Hong Kong or New York. According to new revelations, these destinations are being replaced by less-common ones such as Miami, Geneva and Long Island.
A UHNWI is defined as an individual worth more than $30 million and the report states that there are more than 211,000 such people globally. These are increasingly interested in purchasing non-traditional luxury homes outside the countries of their origin or residence.
According to Wealth X data, international homes accounted for 11 percent of non-primary UHNWIs’ residences five years ago; today, they account for 16 percent. Roughly 80 percent of UHNWIs are the owners of at least two homes, while more than 50 percent of them own at least three homes.
Consequently, UHNWIs are increasingly spending more time away from their primary homes and in their additional residences.
Researches divided luxury properties into four categories, based on the top demands of high-end residence buyers.
These include: Green Homes, Smart Homes, Private Island Homes and Serviced Apartments.
Due to rising demand, many luxury homebuilders are now focusing on sustainability. “Efficiency measures incorporated in building luxury properties now include solar power, geo-thermal heating, rainwater collection systems, the use of renewable materials and touch technology to control heat and lighting,” the report revealed.
The rising demand for green homes is led by younger UHNWIs. This has increased in Western Europe and North America over the past five years. Now, China is becoming more aware, with environmentally friendly construction rising by 19 percent over the past year.
As technological advancements become more accessible, demand for Smart homes is growing exponentially.
Forecasts released by research firm Juniper state that the global Smart home market will be a $60 billion industry by 2017.
There is no set criteria by which to measure the Smartness of a home, but a common understanding is that Smart homes are those that incorporate “numerous networking technologies and communication interfaces… entertainment control systems and health monitoring systems,” according to the report.
The demand for Smart homes is witnessing an aggressive rise, with close to 65 percent of Sotheby’s International Realty® network members reporting an spike in inquiries for homes with Smart elements during the past year.
Private island homes
Statement homes are not new to UHNWIs. But owning a private island seems to be the latest practice in ensuring a showcase home: the ultimate statement.
There are currently more than 1,000 private islands available for sale, with the market witnessing a spike following the 2008-2009 recession, according to Wealth-X and Sotheby’s researches.
The most popular private island locations remain the Caribbean and the Mediterranean, but Southeast Asia is growing in popularity as a favored destination to own an island home. Other locations appearing under the radar are Canada, Belize and the United Kingdom.
The popularity of island homes can be due to the common preference of having a waterfront home and the desire to escape the hustle and bustle of UHNWIs’ daily lives.
Given their international lifestyle, UHNWIs who own multiple homes need someone to take care of the property in their absence. “Many UHNWIs currently spend more than one month per year away from their private residence.” For this reason, “serviced apartments and hotel residences have grown in popularity around the globe,” the report stated.
Elements comprising a “serviced” residence can include a concierge service, valet, housekeeping and security personnel.
The report focused on Miami, Geneva and Long Island as the up-and-coming go-to locations for owning a luxurious second or third home.
Below is a breakdown providing generic information about the market in these areas.
|Average price per sqft||$975||$1955||$900|
|Average luxury home listing price||$1.9m||$4.1m||$2.5m|
|Average number of bedrooms||4||5||3.5|
|Industry||23 percent in finance, banking and investment||31 percent in finance, banking and investment||19 percent finance, banking and investment|
|Leading hobby||Sports, outdoors||Philanthropy, art||Sports, outdoors|
|Self-made wealth||67 percent||43 percent||65 percent|
|Origin of top foreign owners||Argentina, Cuba||UK, Germany||UK, Canada|
This is the last of four research reports produced in collaboration between Wealth X and Sotheby’s International Realty® for 2015. This report was preceded by the Global Residential Luxury Real Estate Report; Europe, Middle East and Africa Luxury Residential Real Estate Report and UHNW Luxury Real Estate Report: Homes As Opportunity Getaways.