luxury property

India’s luxury housing market at a standstill

Isaac Mostovicz writes that many luxury apartments under construction in India are yet to be sold...

Donald Trump is soon to take the Trump brand over to India, but the Wall Street Journal reported recently that India’s surge in luxury property might be a while off yet.

Growth in India has boomed in recent years where there are now more than 126,000 US dollar millionaires. In Mumbai, where Trump’s new 60-story luxury apartment will be launched, around 3,700 luxury properties are currently under construction with a price tag of $1 million or more. Yet of these, around 1,440 are still unsold. In Delhi, one quarter of the 2,300 luxury apartments under construction are unsold. In the last few months, sales have slowed down due to the steep prices, which have seen some properties come with a price-tag of up to $12 million.

In India, property developers tend to ensure apartments have a definite buyer before finishing construction. With higher rates, and fewer interested buyers, many of these prospective apartments may be put on hold which may mean developers have to cut prices or offer perks to entice buyers. This step has not yet been taken, but with the Indian stock market having fallen by more than 10% this year, and banks becoming increasingly cautious about lending to real estate developers, the pressure is on and the clock is ticking.

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Luxury property market is booming in Hong Kong

Isaac Mostovicz writes that the luxury property market resurgence in Hong Kong could bring benefits across Asia and globally....

There’s an interesting report in The Wall Street Journal about the current state of the luxury property market in Hong Kong.

According to the report, the market is seeing a surge in sales, and the prices are high.

Demand for ultra-luxury property in Hong Kong has been growing strongly in the past few years, pushing prices in the segment to dizzying levels because of a scarcity of supply—particularly of townhouses and detached houses in urban areas—and the rising wealth of some buyers in mainland China looking for investment opportunities. Luxury-property prices in the city soared about 50% last year, compared to a nearly 30% rise in the market overall.

China’s presence in Asia as a leader in luxury has been a long time coming, and has been reported on in the mainstream media with increasing frequency.

In February it was reported that London’s luxury property market was experiencing an up-tick in sales. I blogged about it back then, but made no mention of foreign buyers because there was no evidence to suggest it.

This report, however, says that Chinese buyers are flocking to London to buy luxury properties.

Some of the mainland Chinese buyers who are thought to be driving up the price of luxury property in Hong Kong are also having an impact on high-end property further afield. China’s super-rich are particularly active in London, attracted by depressed property values and the decline in the value of sterling. Earlier this year, Hong Kong billionaire Joseph Lau, chairman of Chinese Estates Holdings, paid US$54 million for a six-story mansion in London’s Belgravia district that reportedly features its own cinema.

I did, however, blog about the recent trend of Chinese people heading west in search of luxury goods, a trend which appears to be continuing.

Do these developments constitute a “rebound” of the luxury market to previous levels? Hard to say. What we can be sure of is that the industry is recovering both globally and locally, and doing so quickly.

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London’s luxe property rebound helped by travelling Lambdas

Isaac Mostovicz writes that foreign Lambda personalities are helping fuel a luxury revival in London...

Earlier this month I reported that London’s luxury commercial property market was heating up. The trend continues to this day. But now it is being helped by a spike in London’s luxury home prices, which is seeing the highest price increase since March 2008.

BusinessWeek has more:

The value of houses and apartments costing more than 1 million pounds ($1.5 million) rose 3.2 percent from January, the London-based property broker said in an e-mailed statement today. The annual increase was the largest since the market peaked in March 2008 and compares with an 11.5 percent advance in January.

Overall this is good news for the luxe market both in the UK and abroad. But read a bit further in the article and you’ll see the emergence of a trend that I referenced in a previous blog post about Chinese Lambda personalities buying Western art and vintage wines, something that is somewhat uncommon in Mainland China:

The pound’s 22 percent decline against the euro in the past three years attracted purchasers from Russia, Italy and Greece, in particular, Bailey said. Foreigners bought 45 percent of properties sold for more than 2 million pounds in the past year, according to the broker.

Theta personalities typically own numerous properties across their homeland, and perhaps one or two smaller properties in other countries. Those properties are likely to cost <$1 million. So when we see that 45 percent of properties sold for >£2 million ($3 million), this tells us that these foreign buyers are likely Lambda personalities. Owning a luxury property in London is seen as an accomplishment, both personally and professionally.

Consumer confidence in the UK is on the rise, which helps to explain why this is happening now. Things aren’t great, but they’re better than than they were. Lambdas are seeing an opportunity to re-assert their dominance and be among the first to polish their images with spashy purchases.

Watch for similar trends in more traditional luxe markets such as Paris and Berlin. London could just be the start of a the new European luxe revival.

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London’s luxury residential property market rebounds

Isaac Mostovicz writes that a resurgent luxury residential property market in London could have global implications if it becomes a trend...

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Signs of life  in the beleaguered luxury market continue. First it was in Europe’s yacht docks, where mid-sized yacht sales are picking up steam.

Then in Silicon Valley, where luxury vehicles are seeing month-on-month increases in sales. And more recently across America’s upscale department stores, which are seeing sales jumps of around 7 per cent.

Now in London there are reports that the luxury commercial property market is heating up once again. The Financial Times has details:

The Royal Borough of Kensington and Chelsea has sold land overlooking Holland Park in London for more than £100m to a joint venture between the Duke of Westminster’s Grosvenor Estate and Native Land, underlining the scale of the recovery for luxury residential property.

It’s important to watch what happens after this deal. Is this the start of a trend, or a one-off event? If it becomes a trend, then London’s luxury property market could recover quickly than most other luxe industries.

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Luxury real estate surges in India

Isaac Mostovicz writes that because of India's growing population and GDP, the local luxury industry will grow alongside it...

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A new report is out on the state of India’s real estate industry. The findings show that demand for luxury homes is growing at a quick pace.

This is yet another example of luxe industry diversification in the face of faltering demand from the West. This pull-quote from the report sums it up well:

Medium and luxury housing segments are expected to witness significant growth in the coming years. It is expected that medium housing segment will record CAGR (compound annual growth rate) of around 25% while luxury housing will see CAGR of nearly 33% during our forecast period (2009-2013), against CAGR of just around 4% in affordable housing.

I wrote previously that the luxury industry is re-focusing away from western markets, to lesser well-known, and emerging economies.

India is considered a developing country with a more than 1 billion people and a growing GDP. As a result, the luxury industry will continue to grow and prosper.

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Unique “Supersuite” for Madison Square Garden

Isaac Mostovicz writes that a famous New York venue is upscaling...

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World famous sports and entertainment arena Madison Square Garden in New York City, is developing a “supersuite” for the highly affluent segment of its clientele. The 5,000-square-foot suite will fit up to 300 people and is said to feature granite-topped kitchen islands, formal dining tables, full bars and a fireplace.

The cost of enjoying the supersuite remains to be confirmed as pricing decisions have not yet been made, but the Vice Chairman of MSG, Hank Ratner, has said the company is trying to learn from other sports venues who are cutting their prices in an uncertain economy. The Yankees, for example, have cut the price of over 100 front-row seats from $2,500 to $1,250 after seeing empty rows of the top-priced spots game after game.

But prices are still likely to be only in range for a select few. MSG is determined to pursue the development despite difficult financial times, and hopefully there are still enough people able to afford spending their money on this type of experience. As MSG itself is already a very strong brand on a global scale, it definitely has good prerequisites.

The supersuite is also likely to appeal to most people, whether they have Theta or Lambda worldviews on luxury. The self-focused Lambda would be attracted to the opportunity to show off his wealth in this one-of-a-kind environment. The Lambda would also be drawn to the freedom of movement and sense of independence that the suite would offer, as compared to even the most attractive seats. The socially-focused Theta would instead find it appealing as a means of gathering all of his friends and associates together in one place.

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Using Diamonds to Lure Real Estate Buyers

Isaac Mostovicz writes...

The New York real estate market has been hit hard by the credit crunch, experiencing a dramatic downturn in sales, to such an extent that realtors are turning to extreme and unusual methods to attract buyers for their homes.

Hall F. Willkie, president of Brown Harris Stevens, is holding a number of sophisticated events at his new residential developments to lure in the luxury buyer. He accepts that with slow markets there is a call for price cuts but still feels that there is a place for unique events. Recently, the firm has tried exhibiting a range of expensive jewellery, with a diamond expert on hand to offer advice. He has also joined forces with Christie’s, to hold a preview for an auction of modern South Asian art in their luxury apartments.

A different approach to securing a buyer could be offering one’s house as first prize in a raffle. This is indeed what Tim and Zoë Bawtree are in the process of doing. After the £850,000 house, which featured on Grand Designs, failed to sell through traditional methods, they dreamt up the contest in a bid to beat the housing slump. Each ticket has gone on sale for £25; however there is a catch – the three-bedroom “eco-home” home will only be given away if at least 40,000 tickets are sold. This is to cover the costs of stamp duty, furnishings and a donation to Cancer Research as well as the value of the house.

However, Michele Kleier, president of Gumley Haft Kleier, believes that the luxury buyer will not be seduced by gimmicky special events, calling it ‘a waste of time’.

“Nobody who’s spending $13 million on an apartment cares about your free vacation to Disney World or Chocolate tasting with five different chocolatiers. If you need a gimmick to get me in, there’s something wrong with this apartment”.

Only time will tell whether the gimmicks will lure and secure luxury house buyers, but in a period when the housing market has reached an all-time low, it might be worth staging fashion shows, art exhibtions and book signings to get the prospective buyer in.

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London is No Longer the Leader for Luxury Living

Isaac Mostovicz writes...

An index complied by Knight Frank LLP revealed that London has lost its number one position of being the ‘world’s most expensive location for luxury homes’. Monaco is the successor, with the average price of its most expensive houses and apartments increasing by 30% to £3,762 per square foot in the second quarter from a year earlier. London’s increase was a mere 1.8% to £3,291 in comparison.

Liam Bailey, head of residential research for Knight Frank, highlighted that this was due to job cuts by banks and the prospect of lower bonuses, was discouraging buyers. London’s property market has been in a steep decline, with even Buckingham Palace being affected to the tune of $100 million in depreciation.

Monaco’s luxury property market has prices reaching approximately $7,000 per square foot. Monaco is also home to the world’s most expensive street, Avenue Princess Grace in Monte Carlo, where an apartment costs tens of millions.
The top 10 locations:

1. Principality of Monaco
2. London, England
3. Cap Ferrat, French Riviera
4. Courcheval, French Alps
5. New York, USA
6. Moscow, Russia
7. Tokyo, Japan
8. Hong Kong, China
9. Sydney, Australia
10. Paris, France

North MS Realtor says of this article...

I found your blog today and love it, keep up the good work!

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Island Living as the Ultimate Luxury

Isaac Mostovicz writes...

John Donne once said that no man is an island, but newly released findings from U.S.-based Coldwell Banker suggest that man still wants to buy himself a piece of one as the ultimate luxury home site.

More than 300 rich households in the U.S. were interviewed for the poll.  To be classified as such, they must own a home worth in excess of $1 million dollars and have an equal amount of liquid assets to invest.

27% responded that their dream home would be located on an island while another 22% preferred a more rustic setting and only 18% selected a suburban or foreign location.

Interesting that many of these choices seem to reflect a desire to escape — or at least get away — rather than become more connected.

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Luxurious “Must Haves” for Homes

Isaac Mostovicz writes...

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Rapid property inflation has removed the prestige of the formerly exclusive million-dollar home according to Canadian estate agents Royal LePage Real Estate Services Ltd.

Seven-figure properties are increasingly being snapped-up by the middle-classes, spawning a new benchmark for luxury as the rich seek ways to distinguish themselves from their neighbours. Royal LePage have published a top ten ‘must have’ feature list for any truly luxury home, which could cost as much as $400,000 to install. LePage agents defined the new yardsticks of exclusivity as follows:

  1. A car lift for the garage with an indoor car wash. Car lift is $2,500 to $6,500 while car wash is $30,000.
  2. Walk-in refrigerator. Cost $7,000 to $20,000.
  3. Spa, gym or yoga studio. Cost $50,000.
  4. Wine Cellar. Starts at $60,000 and can go to $150,000.
  5. Concierge Services. Rate of $50 to $75 per hour with a minimum purchase of 50 hours.
  6. Media room. Starts at $50,000.
  7. Wrapping or sewing rooms. Starts at $5,000.
  8. A wired home. Cost $25,000.
  9. Home elevator. Cost is $30,000 for equipment and installation with construction extra.
  10. Heated driveway. Starts at $5,000 for 600 square foot driveway.

The list shows how changes in lifestyle and technology in particular are influencing the property market and the demand for new luxuries, with time saved by concierge services spent on personal indulgence such as spas whilst technology is harnessed not only to do chores such as washing the car but also to set new standards for entertainment facilities.

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