Explosion in the USD1 million plus luxury housing market
Category News
The international luxury housing market experienced explosive growth in 2013 with prime property sales reaching a high of 41 700 in the US$1 million-plus market compared to 35 000 in 2012.
This according to a newly released report on the international prestige property market by Christie’s International Real Estate, the world’s leading luxury residential real estate network and the real estate arm of Christie’s Art House.
Now in its second year, Luxury Defined: An Insight into the Luxury Residential Property Market, presents an in-depth analysis of luxury market trends and compares 10 of the world’s top property markets: Cote d’Azur, Hong Kong, London, Los Angeles, Miami, New York, Paris, San Francisco, Sydney, and Toronto.
Using ‘Christie’s International Real Estate Index’, markets were ranked across key metrics including record sales price, prices per square foot, percentage of non-local and international purchasers, and the number of luxury listings relative to population.
London topped this year’s Index, with a US$101.5 million top sale and average luxury home sale prices of US$4,683 per square foot. New York and Los Angeles ranked second and third, respectively, driven by exceptional growth in luxury sales volume. And despite government cooling measures impacting sales volume, Hong Kong still performed strongly, ranking fourth with an exceptional US$83.3 million top sale.
Chief Executive Officer of Christie’s International Real Estate Bonnie Stone Sellers said that the momentum in luxury sales can be attributed to substantial wealth creation in 2013, fuelled by an improving global economy and surging stock-market prices, resulting in more millionaires and billionaires than ever before.
With more people in the world moving to and living in cities, the report noted that urbanism will continue to flourish in this decade and beyond as innovative firms cluster around expensive urban areas, attracted by the productivity and creativity that so-called agglomeration cities induce. The luxury homes markets that rebounded the strongest in 2013 are in urban centres.
Chris Tyson, CEO of Tyson Properties, a Christie’s International Real Estate affiliate, says this trend is reflected in Durban too with luxury housing estates like The Executive in La Lucia, Hawaan Estate in Umhlanga and Zimbali Estate in Ballito showing phenomenal growth.
The Executive development situated on La Lucia Ridge offers spectacular views of the Durban cityscape and the Indian Ocean. The exclusive homes are built from sustainable materials and are designed with contemporary, modern living in mind.
Tyson Properties Umhlanga currently has a sole mandate on the estate’s most expensive completed home - a 760m2 home offering a blend of open-plan and private living spaces, five beautifully appointed suites as well as high-tech home automation, an infinity pool and a lift. The price tag – R17.5 million.
Tyson Properties agent Mark White says they are having a very busy year in terms of buyer interest.
“We have seen a marked increase in buyer activity with up to ten clients visiting the estate each week. We have also seen the 2013 record land sale of R3.8 million being surpassed twice – this year one plot sold for R4.3 million and another for R5.25 million,” he said.
“Due to its locale and the fact that the facilities cater more for the residential market, 95% of our sales are to clients looking for a permanent home. We currently have four stands left from the developer, two resale sites, 16 homes under construction with another 10 due to start this year,” said White.
In Umhlanga, the exclusive Hawaan Estate is generating much interest. Developers of the Estate Pat Naicker and Tony O Neil, have created an indigenous forest residential estate and have been careful to augment the value of the existing eons old Hawaan Estate that fringes, the river, the sea and the estate.
Tyson Properties has been an integral part of the estate’s sales team since 2012 when they won the marketing of the remainder of the unsold plots. They sold out all 19 plots, as well as five resale plots. These were priced from R1 700 000 through to R1 850 000. The plots that now remain are only resale plots priced from R2 400 000 through to R4 million. There is still a lot of interest in these remaining plots.
Tyson Properties agent Tessa Douglas says there is a lively interest in the estate.
“We have interest from a lot of buyers, mostly local looking for a secure home, and we expect that this interest will soon translate to sales. The last two homes sold were just under R10 million each,” she said.
Travelling north from Umhlanga, the Zimbali Coastal Resort and Estate outside Ballito is known for its exclusivity and luxury. Established 16 years ago, the 700-hectare estate attracts discerning buyers, both from within South Africa and overseas. Seventy percent of buyers in the estate are locals and the balance are overseas investors. A large portion of the properties are holiday homes or homes that the owners commute to over weekends.
In the past land has sold for R2 million but prices usually start at R4 million. The price of completed homes also start from around R4 million while the most expensive listing at the moment is a home for R48 million.
The Christie’s report also identified three prominent buyer groups; local buyers at the lower end of the luxury market, the younger millennial buyer – children born of Baby Boomer parents after 1980, and overseas buyers.
The millennial buyers comprised a growing segment of $1 million-plus home buyers in many of the indexed cities. These younger buyers spend a significantly larger percentage of their wealth on homes and want amenities such as open-floor plans and high-tech, fully automated home environments.
The high-net-worth overseas buyers, were driven to invest in trophy homes outside their resident countries because of a desire to move equity from turbulent markets to stable, currency-favourable locations. In addition to wealth protection and currency attractiveness, many international local buyers also purchased homes abroad because of educational opportunities for their children.
Other information coming out of the report indicates that changes to tax laws did impact some prime property markets in 2013, but in general they had little impact outside of Asia and France.
In addition, luxury real estate continued to show a strong correlation with the top end of the fine art market as opposed to the general housing market.
“The synergy between fine properties, such as these, and art is natural, as art and real estate are assets of passion and lifestyle and the same people who buy fine art buy luxury real estate,” said Tyson.
Caption: This ultra-modern smart home is selling for R17.5 million in The Executive development in La Lucia.
Tyson Properties is a KZN-based property group with 19 offices across the province. The group was invited to become an affiliate of Christie’s International earlier this year. An honour extended only to the most accomplished real estate brokers at the top of their market. Christie's International Real Estate is a global authority on the effective marketing of fine properties worldwide. The Luxury Defined report can be accessed at www.christiesrealestate.com/luxury-defined
Author: Tyson Properties
