Demand for luxury homes in the Europe, Middle East and Africa region is strong as ultra-wealthy individuals are buying around the world to further diversify their holdings.
London is top for demand but cities such as Madrid, Dubai and Cape Town are also popular with wealthy real estate buyers, according to a new report by Wealth-X and the Sotheby’s International Realty.
The UHNW Residential Real Estate index tracked by Wealth-X hit a new record high of 112.1 in the first quarter of 2015, up nearly 4% from the fourth quarter of 2014, and 7% from the first quarter of 2014.
London remains the top real estate hub for the EMEA region. The city’s price per square foot at US$3,103) s nearly four times that of Dubai, six and nine times more than Madrid and Cape Town respectively.
The report says that a third of all premium London properties for sale, that is homes valued above US$1 million, are worth more than US$10 million. By comparison, Dubai has only 8% of its luxury properties listed in the super prime range above US$10 million.
The less expensive price per square foot for premium real estate in Cape Town generally leads to larger houses. A luxury property in the South African city has six bedrooms on average, higher than Madrid and Dubai, the two other cities profiled in the report.
‘Luxury residential real estate encapsulates a core part of the identity of the super-rich. As their wealth continues to grow, so will their investment fueled by flight to safety from less geopolitically stable geographies,’ said Wealth-X president David Friedman. According to Philip White, president and chief executive officer, Sotheby’s International Realty, the research shows that trends and the economic climate in some EMEA countries are stimulating alternative investments such as real estate in these local markets.