The euro crisis and fears of a double-dip recession in the US and much of Europe have done nothing to upset the sentiment at the top of the global residential property market.
The world’s super rich are still buying luxury properties, or those priced $5 million (€3.62 million) or over, and are mostly paying cash to do so, according to a report released by Christie’s International Real Estate.
The top end of the property market in cities like London, Hong Kong, New York, Paris, Zurich and Beverly Hills has remained buoyant with almost 70% of Christie’s affiliates reporting an increase in activity for the first eight months of 2011 when compared with the same period in 2010.
Giles Hannah, director of sales for Europe at Christie’s, reckons scarcity of quality properties is driving up prices in central London and he’s predicting up to a 25% rise in prices of luxury properties over the next three years.
“We are also expecting new price records to be set, exceeding the current rate of £6,000 (€6,868) per square feet. Scarcity will drive the market forward and there will be a fight for quality property,” he said.
Shortage is also boosting growth in Paris, as strict planning regulations restrict construction of new property. “Clients are multi-millionaires and billionaires and are ready to pay the asking price as there is limited supply,” said a Paris-based property analyst.
While buyers of high-end properties in much of Europe are predominantly from Russia, China and the Middle East, the prime market in the emerging economies of South Africa and Brazil has a greater concentration of local buyers.
“The Brazilian market is not as mature as the Swiss or the US market, but there is money coming in. We don’t see many Russian oligarchs, nor have we seen any Chinese buyers, but they will come – we remain confident of that,” said Francisco de Santos, a property agent based in Brazil.