By Adriaan Brits. Originally published at ValueWalk.
- The luxury real estate market appears to be growing in countries such as America and Israel.
- Liv @ MB Condominium adds to Singapore’s luxury real estate appeal.
- Despite the impact of the Covid pandemic, the luxury real estate market continues to expand.
Even though the world economy is currently dealing with the aftermath of the Covid pandemic, some industries seem to be thriving. Many European and Asian real estate markets have remained stagnant since the outbreak of the pandemic, according to research. For example, during the peak of the pandemic sales in China’s largest cities plummeted by 22%, but prices rose by 5.8% during the year. Unlike China, the Singapore market remained relatively steady during the crisis.
Understanding Luxury Real Estate
Before investing in luxury real estate, it’s critical to understand the characteristics that define luxury real estate. A property’s expensive price tag alone will not put it in the luxury real estate category. High-end purchasers want locations that are close to other high-end properties and offer access to luxury activities such as high-end shopping, dining, and access to the arts.
A prestigious address, such as Park Avenue in New York City, increases the value of a property. When it comes to real estate, location plays a key role. Another aspect that adds value to a property is history. Many potential buyers tend to pay more for a property if it has a rich history.
As mentioned above, location is important. A waterfront location, or at the very least vistas of a river, ocean, or lake, can be attractive to many luxury purchasers. Others may prefer views of the countryside or mountains.
Even though the Covid pandemic has influenced many industries negatively, the luxury real estate market continues to grow. Below we will analyse the state of luxury real estate in various countries:
The State Of Luxury Real Estate Worldwide
Singapore
In recent years, Singapore may have surpassed many advanced cities, such as Hong Kong, as one of the most sought-after investment locations for the wealthy. Efforts to improve the country’s economic infrastructure, like the addition of the Liv @ MB Condominium, have enhanced its global prominence and appeal to wealthy investors during the last decade. Mr Eduardo Saverin, a millionaire entrepreneur and co-founder of Facebook, is one of the many billionaires and celebrities flocking to Singapore to acquire luxury properties.
Singapore is attracting ultra-high-net-worth individuals to buy real estate due to the fact that the country’s income and estate taxes are deemed cheap by worldwide standards. Investors also save money on taxes because capital gains are not taxed and the top personal income tax rate is only 22%. While Singapore’s real estate market appears to be vulnerable to property constraints and economic headwinds, the downside risks have been mitigated by a combination of variables such as low crime rates, political stability, business friendliness, and legal openness.
Why Invest In Singapore?
Rich investors have been coming to Singapore to invest in real estate, with many setting up family offices in the hope of securing permanent residency through the country’s Global Investors Programme. One of the biggest perks associated with permanent residency is reduced stamp duties on real estate, which is what is drawing these investors.
Due to its excellent political stability and policies, Singapore’s property market has consistently attracted ultra-high-net-worth individuals and thus the country seems to be one of the most trusted countries for luxury real estate investment. In a recent Forbes article, billionaires Kwek Leng Beng and Gordon Tang reveal that they are investing S$965 million (equivalent to $704 million) in top Singapore properties, amid the growing demand for luxury houses in this country.
America
In America, the city of New York is seeing a surprising rise in interest in luxury real estate. According to a CNBC article the third quarter of 2021 saw the greatest sales in Manhattan in more than 32 years at all price points. With residences that cost more than $4 million being sold. Many New York brokers believe that this is just the beginning and that the excitement will continue in the coming months.
Tel Aviv
Research suggests that there have been numerous real estate deals for NIS 30 million or more in the past year. Despite the Covid-19 crisis, Israel’s real estate sector, notably the high-end luxury market, continues to thrive. Buyers are looking for a remote property that they can stay in for longer periods of time, rather than the weekend getaways that they used to buy. If the high expense of maintenance and the headache previously discouraged them, the need for a property to get away from the city has grown.
Final Thought
Because of its tangible aspect, investing in luxury real estate might be more rewarding than investing in stocks. It can be done in a variety of ways, including building a custom home, flipping a mansion, or purchasing a vacation property. You can live in your luxury home, vacation in it, or rent it out to others, or you can create luxury homes for others to enjoy. Before making a final selection, it is recommended that you conduct research on the properties available in various countries as well as the country’s economic situation.
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