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What Matters Most to the World’s Elite?

Owning real estate is an obvious symbol of wealth for most people. And the wealthiest certainly agree, according to the latest report from Luxury Portfolio International. That report, “Luxury Real Estate: What Matters Most To Today’s Global Elite,” finds that 35 percent of high-net-worth individuals, or HNWIs, view real estate as the most obvious indicator of wealth.

Wealthy Europeans in particular are fond of real estate in a status sense. The report finds 44 percent of wealthy Europeans view high-end real estate as a valuable symbol of their global standing. Thirty-eight percent of wealthy Middle Easterners also show a strong association between wealth and real estate. And a 38 percent of the HNWIs overall say they are looking to buy luxury real estate within the next three years.

But the report finds that luxury real estate means more than pure investment and capitalism to wealthy individuals. In fact, 37 percent, of HNWIs say they have a real, strong emotional connection with their luxury homes, and 40 percent of luxury home buyers say the main reason they bought or want to buy a personal residence is to improve their quality of life, not for status. More than three-quarters of those surveyed said their residence is a home—a place with emotional ties, rather than just a house.

Luxury buyers around the world also tend to prefer cities, according to the report. Overall, 59 percent of luxury buyers prefer urban locations. North American HNWIs were the only ones to prefer suburban locations more. In both the Middle East and Asia, potential buyers overwhelmingly seek out urban locations for their next home.

Still, real estate is an investment, meaning it's still business for investors.

“Despite this emotional connection, 85 percent of wealthy buyers consider the purchase of real estate a rational choice,” said Stephanie Anton, president of Luxury Portfolio International.

At 23 percent, the interest in selling within the next three years is smaller, “pointing to a continuation of a seller’s market in the high-end, with fewer sellers than buyers expected and potential for inventory challenges to grow or persist in places already struggling with having enough homes to meet interest and demand,” the report states.

Luxury Home International finds that the difference between buying and selling is most dramatic in Asia, where just 18 percent of luxury consumers are looking to sell and 68 percent are looking to buy.

“We are pleased to see that as we watch wealth grow among the top 10 percent of consumers globally, so too do we see continued interest in, and appetite for, luxury real estate both as a financial as well as an emotional investment,” stated Anton.

About Author: Scott Morgan

Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He's been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing.

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