One among many, finding from new Luxury Portfolio International research reflects significant shift in gender distribution among younger luxury homeowners
Chicago, IL – May 24, 2023 (BUSINESS WIRE) Women account for 54 percent of luxury homeowners under 35, indicating a significant female presence in the purchasing of luxury real estate.
Per a new study from Luxury Portfolio International, more women are climbing the corporate ladder and achieving financial success on their own, with an equal percentage of men and women in corporate leadership – 48 percent – reporting that they hold executive leadership positions. This is reflected in the changing demographics of luxury homeowners.
“Affluent young women are on trajectory to level the playing field, wielding purchasing power, wealth accumulation, education and corporate positions to make serious real estate decisions earlier in their life,” said Mickey Alam Khan, New York-based president of Luxury Portfolio. “This has major ramifications for brands and retailers targeting homeowners and the luxury property sector.”
Luxury Portfolio is a leading network of independently-run real estate brokerages, with 250-plus firms in more than 35 countries.
Catching up
The latest findings are part of Luxury Portfolio’s ongoing State of Luxury Real Estate research, taking adeeper look at the evolving global demographics of luxury homeowners and what it means for the industry.
The data was culled from surveys in 24 countries, including the United States, United Kingdom, key parts of Western and Southern Europe, Middle East and Asia Pacific.
The Luxury Portfolio study found that among luxury owners under 35 years old, 51 percent have a master’s degree or higher, while this figure stands at 62 percent for those aged 35-64.
Overall, the younger generation remains a highly educated and ambitious group.
Another notable difference between the age groups lies in job titles and varying levels of responsibility.
Younger luxury homeowners tend to hold junior (23 percent) and executive (46 percent) positions, while middle-aged owners lean more towards senior (24 percent) and executive roles (51 percent).
“This data suggests that younger individuals are making significant strides early in their careers, acquiring luxury homes at a faster pace than previous generations,” Mr. Alam Khan said.
“Indeed, it follows a broader trend among the affluent that the ‘first luxury experience’ is happening earlier in life now for today’s young people compared to generations past,” he said.
Luxury Portfolio International (luxuryportfolio.com) is the world’s leading network of independently-run luxury real estate brokerages and their top agents, offering marketing and intelligence services across the globe. Marketing 50,000 luxury homes annually, Luxury Portfolio comprises 250-plus luxury brokerages in more than 35 countries. It is the luxury arm of Leading Real Estate Companies of the World®, a global network of top independent real estate firms, with 550 companies and 136,000 sales associates in 70-plus countries. Well Connected.™
Scope of research focuses on the top 5% income earning households in 28 global markets across six continents; represents the opinions of 90% of the worlds affluent
New York, NY – Jan. 5, 2023 (PRNewswire) The global wealthy are living in a state of adaptability to uncertainty, but quite bullish about ultra-luxury residential real estate, according to just-released research by Luxury Portfolio International® (LPI), the world’s leading luxury residential real estate network.
The study reveals that the global wealthy (UHNWI) are living in a state of adaptation to changing (and often unpredictable) circumstances, yet confident. The study also reveals that the outlook for worldwide wealth is positive ahead of the next five years.
While aware of potential headwinds from economic and geopolitical uncertainties — along with ever-growing concerns about climate change and the continued threat of COVID — they are resilient.
With both the transference of wealth and the overall growth of wealth in the top 5%, they are aware of the challenges, but are generally undaunted, as most saw their fortunes improve in late 2022 and expect 2023 to be an even stronger year.
The good news for the global luxury residential real estate market is that, within this segment of the market, prime property continues to be a solid investment in a time of upheaval with financial investments. Both owners and buyers expect values to rise in 2023, and that investment-property purchase expectations will remain at 2022 levels without diminishing.
Key findings from the global study include:Affluent Housing Shortage Continues
For the third consecutive year, the number of buyers is greater than the number of real estate sellers, as inventories continued to dwindle, especially in the luxury sector. This shortfall in the total number of available housing units impacts choice, and in turn, has impacted total sales as consumers wait for the ‘right’ home to purchase. While overall inventory began improving during the second half of 2022 as sales slowed, the need for new housing stock remains a priority. Although improving slightly, 2023 is still expected to have fewer sellers than buyers globally, continuing to feed demand for new markets and new developments.Luxury Homebuyers’ Market Behavior
The mid-2020 to mid-2021 luxury market buying frenzy pushed some prospective buyers out of contention in their most-desired markets. U.S. buyers have adapted to the situation by looking in secondary markets, and there are now hundreds more luxury markets today than in 2019. While 2023 is anticipated to mirror the real estate buying and selling intentions of 2022, consumers remain optimistic in their purchasing plans. So mid-2020, 2021, and half of 2022 remain outliers, with the research revealing that 2023-25 will be off these pandemic highs — but likely stronger than pre-COVID.Where to Buy
Market saturation and lack of inventory has spurred the creation of new luxury locales. The United States minted 199 new luxury places since the pandemic began (defined as locations with median prices exceeding $1 million). Idaho had the fastest growing luxury destinations in the United States between 2019 and 2022. Ketchum and Sun Valley are well-known destinations now joined by Harrison, Hailey, Driggs, Victor, Sagle, Hayden, Athol and McCall. This while familiar luxury spots in California, Washington, Colorado, Texas, Florida and the northeast I-95 corridor, also saw significant growth in listing price: Both the emerging and tried-and-true luxury markets have a number of things in common, including access to lifestyle amenities, in particular outdoor amenities, and they are near cultural centers.The Luxury Homebuyers’ State of Mind
The luxury homebuyer recognizes that a recession is either here, or about to be here. They are also aware of the myriad of global issues, but it does not really bother them. They have instead turned to their significant personal strengths – financial, intellectual, emotional, and social – allowing them to build resilience against the turbulence of the global landscape. In simple terms, they are adapting to the circumstances. One of the offshoots of these adaptations is that luxury buyers are becoming more effective homebuyers. They are prioritizing key facts and figures about the quality of the investment (the facts) while considering the intangibles of the purchase (their feelings). To that end, real estate professionals that cater to reason over emotion (or vice-versa) are only doing half the job that luxury buyers need them to do. Consequently, the priorities for luxury buyers in 2023 is investment quality, both in the tangible (the right setting, a good investment) and the intangible (does it feel good).
When asked to rank their needs and wants in a competitive context (this or that) the hierarchy becomes clear:
Quality of investment
Beauty
Family
Good for the world
Good for me
Certainly, each market and buyer will have their own sense of priority order, but as a global class, these factors are what matter most to them. And lastly, as it relates to mindset, the under-50-year-old buyer is more willing to purchase sight unseen and via online channels.Ready to Entertain, Be Out-And-About Again
The study revealed that luxury homebuyers are resoundingly back in the swing of things when it comes to at-home entertainment. These individuals have a different mindset than their non-buying counterparts, as they are more likely than the average affluent consumer to have plans to attend a large-scale social event. The trend has been mostly steady since the summer of 2022, but there has been a notable uptick in cocktail parties, which may be an early indicator for networking and expanding-the-group social events. This furthermore mirrors an increase in luxury gift-giving.Economic, Political Challenges Not Slowing Down Creation of Global Wealth
Global wealth grew at 13% last year, with forecasts anticipating robust growth through the middle of the decade. As total wealth grows, the number of high- and ultra-high-net-worth individuals also climbs, reaching all-time highs. The millionaire cohort is expected to grow by 40%, to reach new highs of 87 million HNWI by 2026. The United States, China, United Kingdom, Canada, Australia, New Zealand, and India are experiencing the most growth in HNWI’s this year. Japan and European stalwarts France, Germany and Italy have experienced a decline.City Center Remains the Most Desirable Address
While the impact of COVID was an immediate desire for “personal space,” hence exponential demand for single-family dwellings, in particular, among the wealthy, the study revealed that 37% of luxury homebuyers expect to purchase in the city center, where investors outnumber primary homebuyers. This is a positive step, in particular, for areas such as New York City and London, which have come back strong since being seriously impacted during the pandemic. This dynamic is predicted to cause investment-grade properties to come off the market more quickly while dwellers search for turnkey residences, the result being an increase in home prices for city center luxury properties. Luxury buyers are interested in city living for a variety of benefits: nearby shopping, restaurants/night life and a shorter commute. What they will not sacrifice is the quality of schools (whether public or private) and access to parks and nature. In short, the city-center is “back” despite lingering doubts about COVID.
“The luxury homebuyer is arguably the most astute connoisseur of real estate in the world,” said Mickey Alam Khan, President of Luxury Portfolio International®. “The study underscores that they are highly attuned to the realities of the global financial and geopolitical landscape, yet luxury residential real estate remains a preferred destination for their wealth. The panorama of the ‘COVID boom’ is clearly behind us, with the latter half of 2022 ushering necessary market stability into 2023 and beyond.”
Luxury Portfolio International (luxuryportfolio.com) is the leading network of the world’s premier luxury real estate brokerages and their top agents, offering unparalleled marketing and intelligence services across the globe. The network currently comprises 245-plus members in more than 45 countries. It is the luxury arm of Leading Real Estate Companies of the World® the global network of top independent real estate firms, with 550 companies and 136,000 sales associates in over 70 countries. Last year, network members participated in over 1.2 million global transactions. LPI attracts a global audience of visitors from more than 200 countries/territories every month and markets more than 50,000 luxury homes annually. Well Connected.™
The latest report from Luxury Portfolio International®, Luxury Real Estate: What Matters Most To Today’s Global Elite, shows continued interest in real estate as a wealth builder and deep emotional investment
Chicago, IL – Oct. 16, 2018 (PRNewswire) The value of real estate as a means to building wealth, signifying attainment and improving quality of life is highly relevant to high-net-worth individuals (HNWIs) around the world. The latest report from Luxury Portfolio International®, Luxury Real Estate: What Matters Most To Today’s Global Elite, available for download now at luxuryportfolio.com/whitepaper, shows that 35 percent of HNWIs view real estate as the most obvious indicator of wealth. The research, which includes data from YouGov, shows that this is a powerful indicator globally, with Europeans (44 percent) and buyers in the Middle East (38 percent) each expressing a strong association between wealth and real estate. Among all the individuals surveyed, 38 percent are looking to buy luxury real estate within the next three years.
Also driving this interest in luxury real estate is the strong emotional connection to a home. Globally, 37 percent of HNWIs said that an emotional tie was the top reason they purchased their current primary residence. Only in North America did luxury homeowners state that the lot, location and size of the home was a bigger concern. “Despite this emotional connection, 85 percent of wealthy buyers consider the purchase of real estate a rational choice,” said Stephanie Anton, president of Luxury Portfolio International®. “Real estate signifies success for these buyers, both internally and externally to their peers.”
At 23 percent, the interest in selling within the next three years is smaller, pointing to a continuation of a seller’s market in the high-end, with fewer sellers than buyers expected and potential for inventory challenges to grow or persist in places already struggling with having enough homes to meet interest and demand. The difference between buying and selling is most dramatic in Asia where just 18 percent of luxury consumers are looking to sell vs 68 percent looking to buy. In both the Middle East and Asia, potential buyers overwhelmingly seek out urban locations for their next home.
“We are pleased to see that as we watch wealth grow among the top 10% of consumers globally, so too do we see continued interest in, and appetite for, luxury real estate both as a financial as well as an emotional investment,” stated Anton.
Additional findings from this report:
41 percent of all HNWIs surveyed are looking to purchase a traditional-style home for their next personal residence.
The top reason (40 percent) that luxury home buyers gave for the purchase of a personal residence is to improve their quality of life.
78 percent of those surveyed said their residence is a home, a place with emotional ties, rather than just a house.
Overall, 59 percent of luxury buyers prefer urban locations. North American was the only region where suburban locations were slightly more popular (46 percent).
Europeans say that real estate is nearly twice as important as an original source of wealth as those in North America or the Middle East.
About Luxury Portfolio International®
Luxury Portfolio International® (www.luxuryportfolio.com) is the luxury home marketing division of Leading Real Estate Companies of the World®, the largest global network of premier locally branded companies dominated by many of the world’s most powerful independent luxury brokerages. Luxury Portfolio International® attracts a global audience of visitors from over 200 countries/territories every month and marketed over 57,000 luxury homes to over three million high-net-worth visitors last year.
