Chinese and Indian luxury buyers are seeking properties for personal use, while East and Southeast Asian buyers focus more on value-generating assets
According to an overarching study of the world’s most affluent households by Luxury Portfolio International (LPI), the luxury division of Leading Real Estate Companies of the World, 58 percent of Asia-Pacific buyers are in the market for properties over the next three years, a number significantly higher than North American (45 percent) and European (48 percent) buyers.
The State of Luxury Real Estate (SOLRE) included over 25,000 wealthy consumers in the top one to five percent income bracket. Research indicates that as wealth booms throughout the Asia-Pacific region, savvy buyers intend to invest in residential real estate to turn financial gain into real assets. The report also shows that the affluent seller market is falling behind in buyer demand, providing new developments with opportunities to capture additional business.
Most of the Asia Pacific buyers are interested in the USD1 million and above price point (79 percent), with a median price of USD2.25 million and an average of USD3.11 million. Among luxury investors, 23 percent are purchasing at USD5 million or more, and half are buying USD2.85 million properties.
Luxury buyers makeup 46 percent of the total Asia Pacific affluent household but are also a large segment of the affluent buyer population.
Moreover, buyers are expecting their current homes to appreciate in the upcoming years. Indian buyers are the most optimistic, with more than half (56 percent) anticipating home values to increase by 10 percent or more.
Chinese and Indian luxury investors are mainly searching for a residence for personal use with investment properties coming at a far second. On the contrary, East and Southeast Asian households are more focused on investing in value-generating assets.
The report estimates 15.5 million affluent households and 10.3 million in the luxury segment are in the market to purchase property over the next three years. The ratio for buyer interest over sellers is 3:2, indicating opportunities for new developments and existing homes. The top global preference is new developments in key cities and desirable neighbourhoods, which also demand the highest prices.
Mickey Alam Khan, president of Luxury Portfolio International, said, “More than any other region, it is clear that affluent residential buyers in Asia-Pacific see opportunities and plan to be active in real estate now and in the near future. Ultra-luxury buyers are positive about home values rising, and there is sustained interest in prime property both in the Asia Pacific region and internationally. Investment sentiment toward real estate is strong and now outstrips other forms of financial investment. This bodes well for developers and resellers, along with sister industries, such as home design, art, and furniture.”
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