Sales of ultra-luxury homes have seen a significant surge in top markets such as New York, Miami, and Palm Beach, Florida, in the second quarter. According to a report from real estate firm Knight Frank, the number of homes sold for $10 million or more increased by 44% in Palm Beach, 27% in Miami, and 16% in New York. This surge in sales is particularly interesting as it contrasts with the overall decline in ultra-luxury home sales in the rest of the world during the same period.
New York led the U.S. in $10 million-plus sales in the second quarter, reaching its highest total in two years with 72 sales. Miami followed closely with 55 sales, Los Angeles with 42, and Palm Beach with 36. Notably, Los Angeles experienced a 29% decline in $10 million-plus sales, primarily due to the implementation of a new “mansion tax” which adds a 5.5% charge on homes sold for over $10 million.
Despite the overall slow down in luxury markets globally, ultra-wealthy buyers are continuing to pay record prices for rare trophy properties. The surge in sales can be attributed to the creation of substantial wealth, which has fueled the growth in the global super-prime sales market. Rising financial markets have played a key role in boosting demand for these ultra-luxury properties.
In the 11 top luxury markets tracked by Knight Frank, sales of $10 million-plus homes fell by 4% over the previous year to $8.5 billion. Dubai emerged as the world leader in ultra-luxury real estate, with 85 sales in the second quarter. The city has experienced a significant rise in sales, attracting ultra-rich buyers from Russia, China, Europe, and other regions due to its favorable tax and regulatory regimes. This influx of buyers has transformed Dubai into a top destination for ultra-luxury real estate investments.
London, on the other hand, witnessed one of the largest declines in ultra-luxury home sales, with a 47% plunge from the previous year. This decline can be attributed to fears of higher taxes on the wealthy in the U.K. Despite the challenges faced by some markets, falling interest rates worldwide are expected to support sales in the second half of the year. Knight Frank’s global head of research, Liam Bailey, predicts that lower rates will contribute to higher transaction volumes in the coming years, providing new opportunities for ultra-luxury real estate buyers and investors.
The surge of ultra-luxury home sales in top markets such as New York, Miami, and Palm Beach reflects the ongoing demand for high-end properties among ultra-wealthy buyers. Despite challenges faced by some markets, the overall outlook for the ultra-luxury real estate sector remains positive, with opportunities for growth and investment on the horizon.
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