Billionaires are spending money on the pandemic on real estate purchases

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Over the past year, the billionaire’s fortune has reached record heights. Now the real estate market is booming as they spend their newly earned money on properties worth over $ 10 million.

So far this year, 785 properties worth over $ 10 million have been sold in New York, Los Angeles, Hong Kong, London, Sydney, Singapore and Dubai. Knight Frank, a real estate consultancy, estimates that this figure is more than double last year and 52% more than in 2019.

In total, wealthy buyers around the world spent $ 13.8 billion on homes worth over $ 10 million in the first six months of this year. “We expect super prime sales to end at a high level in 2021,” said Liam Bailey, head of research at Knight Frank.

New York City has seen the largest growth in the super-premier category, with 202 vehicle sales exceeding $ 10 million this year. The city has just registered the most expensive property in history: a $ 169 million penthouse at 432 Park Avenue.

The penthouse can be sold at the asking price: According to market research by Corcoran, 220 penthouses have already been sold in Manhattan this year. A separate report by Douglas Elliman and Miller Samuel shows that the average apartment price in Manhattan reached $ 999,000 in the second quarter of this year, a new record.

After New York, Los Angeles saw the largest growth in sales of super-luxury goods. More than $ 10 million in real estate deals this year is three times higher than in the same period last year, which, according to Paddy Dring, head of primary sales at Knight Frank, is due to “lifestyle benefits like beaches and green spaces ”.

But this real estate boom is more than a lifestyle need. The rich have amassed a record amount of wealth over the past year, and with Covid-19 restrictions eased, they are desperately looking for where to put it.

During the first 12 months of the Covid-19 pandemic, the level of well-being reached an all-time high. By October 2020, billionaire wealth exceeded $ 10 trillion For the first time in history. Forbes Billionaire List, which now has 2,755 people, has increased its fortune from $ 8 trillion in 2020 to $ 13.1 trillion this year.

And it’s not just billionaires: last month the cumulative net wealth of the world has reached $ 431 trillion., with more than a quarter controlled by millionaires.

But with inflation approaching, these billionaires and millionaires are now looking for where to put this new-found wealth. Half of investors surveyed by UBS in the second quarter believe inflation will accelerate over the next 12 months, and a third of them plan to invest more in real estate to prevent this from undermining their wealth.

Doubts about the future of the office make residential real estate more and more attractive to investors who have money. There will always be a need for quality housing in New York, Los Angeles, Hong Kong, London, Sydney, Singapore and Dubai.

But it is still unknown whether wealthy people will return to these cities for their money with their newly acquired apartments.

By July of last year, nearly half of the world’s wealthiest people left the cities forever… Expats from Singapore and Dubai came back home and brought real estate to the suburbs or countryside. Along with record real estate prices over $ 10 million, rural markets have hit record highs this year.

One billionaire speaking through Zoom at an English vineyard he bought shortly before the pandemic says there is “no hope” that he will return to London full-time. And yet he is still eyeing real estate investments in the capital. Home sales in London worth over $ 10 million are up 10% year over year.

According to him, buying luxury real estate is a “tried and tested” way to prevent inflation. But it is also a vote of confidence that these cities will one day prosper again.

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