The number of real estate transactions related to the luxury property has been steadily increasing since the positive turn from the Great Recession of 2011 to 2018. With the global economic slowdown becoming more and more prominent, the individuals with high net worth are looking to diversify their portfolio into investments that might be termed non-traditional. This stands opposed to the usual set of bonds and equities and includes the luxury real estate market.
Europe and HNWIs
Europe has recently seen a great rise in the number of High Net Worth Individuals (HNWIs). HNWIs are people who hold at least 1 million dollars in assets, and they are greater in number in Europe than any other part of the world according to the High Net Worth Handbook 2019 by Wealth-X. The number of millionaires across the European content has been increasing year after year, amounting to almost 571 million dollars in 2018 and expected to increase approximately by 22 per cent by the end of 2023. Europe has seen an increase of 4 per cent in 2019, which is nearly 50 per cent more than any other place in the world. The ultra-wealthy individuals always place Europe as the destination of choice because of its economic strength.
Who Buys Luxury Real Estate In Europe
Because of the increasing number of HNWIs in Europe, there has also been an increase in the sale of luxury real estate. However, the largest number of players in the real estate market of Europe seems to be Western Europeans, closely followed by Russian Nationals. This is because of the increased number of international HNWIs purchasing property in Europe because their dual citizenship policy allows it. Among the Western Europeans buying a property in Europe, 38 per cent of the luxury real estate buyers were UK nationals, followed by 15 per cent of German nationals and 15 per cent of Belgian nationals. Even though Britain has the most active luxury real estate buying market, Germany has the largest number of ultra-high net worth individuals (UHNWIs). UHNWIs are individuals who have an account bearing more than 30 million dollars in private assets. Therefore there is a 25 to 30 per cent chance that German UHNWIs might buy more luxury property in Europe by the year 2023 while the UK might see a decline in the amount of luxury real estate sales in the next five years.
The most popular European countries for luxury real estate investment are the United Kingdom, Britain, Germany, Spain, Italy and France. For Europeans and Russians, the most popular options for buying luxury real estate are the United Kingdom, France and Spain. It is also highly profitable because 65 per cent of all the individuals buying European luxury real estate for rental income have seen significant growth over the past four years.