Cape Town 1 Of 3 Cities Attracting World’s Ultra Rich Luxury Home Buyers
Fear of political instability is stimulating the world’s ultra rich to invest in luxury real estate in cities that they can flee to, MarketWatch reports.
London is the top luxury real estate hub for the Europe-Middle East-Africa region but three other cities — Cape Town, Madrid and Dubai — appeal to ultra-high-net-worth buyers seeking luxury properties and great lifestyle, MarketWatch reports.
Ultra-high-net-worth individuals, or UHNW, are people with a net worth of at least US $30 million (after accounting for their houses, shares in private and public companies, and “passion investments” such as art, planes and real estate). This definition is courtesy of WealthX, a wealth intelligence and research company that provides data on the world’s ultra rich.
And there’s lots of them — 211,275 ultra-rich individuals globally, to be exact — who collectively own nearly US$3 trillion of real estate equal to 10 percent of their net worth, according to Wealth-X data, MarketWatch reports.
WealthX and Sotheby’s International Realty released a joint report, “Europe, Middle East and Africa Luxury Residential Real Estate Report For 2015,” giving insight into the market and identifying investment opportunities for UHNW individuals looking to diversify their holdings in the region.
The report featured three cities — Cape Town, Madrid and Dubai — where it said luxury properties and strong lifestyle considerations may appeal to UHNW buyers.
In the first quarter of 2015, sales were up nearly 4 percent compared to the fourth quarter of 2014, and up 7 percent from the first quarter of 2014. This highlights the strength of the global luxury real estate sector based on demand by UHNW individuals, MarketWatch reports.
London remains the top real estate hub for the EMEA region but price per square foot (US$3,103) is nearly nine times more than Cape Town, six times more than Madrid and four times more than Dubai.
A third of all premium London properties for sale (homes valued above US$1 million) are worth more than US$10 million.
The less expensive price per square foot for premium real estate in Cape Town generally means larger houses, MarketWatch reports. A luxury property in Cape Town has six bedrooms on average – more than Madrid and Dubai, the two other cities profiled in the report.
Luxury residential real estate encapsulates a core part of the identity of the ultra rich, said Wealth-X President David Friedman. “It touches upon several key elements in an ultra-affluent individual’s life, including lifestyle, investments and family. As their wealth continues to grow, so will their investment fueled by flight to safety from less geopolitically stable geographies.”
The economic climate in some countries in the region is stimulating alternative investments such as real estate, said Philip White, president and CEO of Sotheby’s International Realty.