Super-luxury homes in far-flung retreats could be the flavour of niche housing markets this year, Knight Frank’s Wealth Report has revealed. According to the study, rural and coastal properties with abundant open spaces could see an uptick in demand.
“The pandemic is surcharging demand for locations like offering a surfeit of wellness like mountains, lakes and coastal hotspots,” said the report, adding, “Demand will help fuel price rises of up to 7% in key markets, this year.”
The study names markets like Auckland, New Zealand, as some of those which could see renewed interest from Ultra High Net-Worth Individuals (UHNWIs) on the luxury-home-buying front.
“Leading prime residential markets have seen average price growth accelerate over the past 12 months,” the report said, “While Auckland led the pack with an 18 percent uptick, reflecting New Zealand’s sure-footed handling of Covid-19, even those markets hard hit by the pandemic, are seeing growth.”
The report lists a coming-together of key factors to aid the growth in luxury residential buying across the world, some of which include low lending rates, a universal hunt for real estate in relatively remote locations, the work-from-home boom, and a change in commuting patterns across the world.
Earlier this year, Knight Frank’s Attitudes Survey claimed that 26 percent of UHNWIs were planning on buying a new home in 2021.
COVID-19 saw the rich get richer
One of the more interesting findings of the Wealth Report, however, is that the number of UHNWIs grew through the COVID-19 pandemic. “With lower interest rates and more fiscal stimulus, asset prices have surged, driving the world’s UHNWI population 2.4 percent higher over the last twelve months to more than 520,000,” it said.
While the US continues to remain the world’s “dominant wealth hub”, Asia is expected to see the fastest growth in UHNWIs over the next five years (39 percent) when compared to the global average of 27 percent, the report said.
“By 2025, Asia will host 24 percent of all UHNWIs, up from 17 percent a decade earlier,” said the Wealth Report, “The region is already home to more billionaires than any other (36 percent of the global total). The Chinese Mainland is the key to this phenomenon, with 246 percent forecast growth in very wealthy residents in the decade to 2025.”
The study makes it clear that while travel will continue to see a fall in 2021 — 84 percent of respondents said they expect to continue travelling less this year — the most significant fallout of this finding is the drop in demand for international education.