Luxury real estate remains a popular investment for the world’s richest audiences, with prime locations such as London, New York, Hong Kong, and Monaco amongst the most sought-after.
Not only does in-demand luxury real estate benefit from capital appreciation, but investors can also enjoy a passive income through long- or short-term rentals, especially as rental prices continue to rise globally.
Read on if you are interested in investing in luxury apartments, townhouses, and villas, and want to learn more about whether luxury real estate is a good investment. Here we answer some of the most asked questions about luxury real estate.
Is luxury real estate a good investment?
There is no question that luxury real estate is a good investment when you look at historical data for the world’s super-prime real estate markets.
Take, for example, the Principality of Monaco, which is considered the world’s most expensive real estate market. The average price per square metre has risen more than 75% in a decade, according to the latest Real Estate Observatory Report.
Other super-prime real estate markets have seen similar price rises. According to the Global Property Guide, prices in Hong Kong over the past decade have skyrocketed by 275% as demand has soared, providing investors with an incredible return on investment.
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And, while super-prime markets have seen a cooling in price increases over the past couple of years, economists and realtors predict that prices will continue to rise, fuelled by rising demand and limited land mass.
What are the most popular luxury real estate markets?
Location is vital when making a luxury property investment. The world’s most popular luxury real estate markets include Monaco, Hong Kong, Munich, Singapore, Shanghai, London, and New York.
There is no question that luxury real estate is a good investment; however, the world’s most exclusive markets have a high entry point, making these markets accessible only to the world’s wealthiest audiences.
For example, according to the Real Estate Observatory Report, Monaco’s average price per square metre now exceeds the 50,000 Euro mark, with exclusive districts such as Monte-Carlo and Larvotto demanding nearly 60,000 Euros per square metre. The majority of luxury properties for sale in Monaco sell for around 5-10 million Euros.
The Global Property Guide states that the average square metre price in Hong Kong is over 27,000 Euros. While this is almost half that of Monaco, the average price of a home still commands around 1.3 million Euros.
In London, the average price of a property is around 700,000 Euros; however, exclusive addresses which are the enclave of the world’s rich and famous, such as the affluent Kensington & Chelsea Borough, see the average price soar to more than 2 million Euros.
In Manhattan, New York’s most exclusive address, the average listing price is around 1.5 million Euros.
Who are some of the most popular luxury real estate investors?
Famous luxury real estate investors include Raymond Kwok, who boasts an estimated fortune of around US$11.4 billion; real estate mogul Sta Kroenke, with an estimated fortune of around US$12.5 billion; Hugh Grosvenor, with a net worth of around $12.9 billion; and Wu Yajun, a self-made real estate billionaire who now owns one of the largest developers in China.
There is no question that investing in luxury real estate has provided incredible returns for these wealthy investors.
What are some of the most in-demand luxury real estate projects?
To cater to the world’s most discerning property investors, developers are increasingly building ultra-luxurious residences in the world’s most sought-after addresses.
Marterrra in the Principality of Monaco is one such example; an ambitious land-reclamation project that, once complete, will boast elegant apartments, penthouses, townhouses, and super rare waterfront villas. The new eco-district will boast a raft of amenities, including residents-only swimming pools, concierge services, a new marina, lush gardens, a waterfront promenade, electric car charging stations, and chic boutiques.
Another super-prime development is Chelsea Barracks in Belgravia – dubbed ‘London’s most coveted neighbourhood’ – a 12.8-acre site which, once complete, will boast Georgian-inspired townhouses and residences, with a long list of amenities, including a spa, gymnasium, swimming pools, treatment rooms, a business suite, billiard room, cinema, residents lounge, and dedicated meeting spaces.
How to invest in luxury real estate?
Those seeking to invest in luxury real estate must work with an experienced real estate agent with knowledge of the super prime market. These specialist real estate agents will be able to provide in-depth market analysis and industry expertise, helping you to ensure your luxury real estate is a good investment that will provide healthy returns in the future.