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Sheen of global luxury houses dims
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THE global luxury housing market lost some of its sheen last year as financial markets became unsettled and many wealthy buyers began to look for less expensive homes.
“The return of realism,” is how Dan Conn, chief executive of Christie’s International Real Estate, described the high-end market that stretches from San Francisco to Singapore.
Sales in a sector whose average home prices start at US$2.2 million slowed in 2015, increasing by 8 percent, half its 2014 pace. The decline most likely reflects stability rather than weakness, according to a report released yesterday by Christie’s.
Properties in London and Hong Kong are sitting on the market longer. On average, homes sold for prices 19 percent below the original asking price, compared with 14 percent below the asking price in 2014. The number of luxury-home sales in the often sizzling Manhattan market fell 5 percent last year. Falling oil prices led sales in Dubai to tumble 25 percent.
“You can’t have massive double-digit growth year after year after year,” Conn said. “In some ways, there is a limit.”
But a luxury market that experts say is normalizing still looks otherworldly when compared with conventional real estate. Some homes include cigar rooms with specialized ventilation and wine collections displayed in climate-controlled glass walls, for example, instead of in cellars.
Around the world, a single square foot in a luxury home varies dramatically — from US$200 in Monterrey, Mexico, to US$4,500 in Monaco. The highest price paid for a home last year was US$194 million for the Barker Road Estate in Hong Kong, which, judging by pictures, was still something of a fixer-upper.
Not all luxury markets reflected the consequences of weaker global economic growth. The cheaper euro helped to boost pied-a-terre buying in Paris.
Yet in an emerging trend, the luxury market last year reached beyond the traditional hubs of global commerce and posh resort towns.
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