Super-Prime Property Market View 2016 – Part Three
February 3, 2016|Super Prime Property
- he third part of our Super-Prime Property Market View series highlights the changing demographics of the ultra wealthy which will impact the market, including the growth in British buyers, female entrepreneurs and most notably, the increase in younger wealth. Understanding the Super-prime Buyer London is home to the highest number of wealthy residents in the world and this is expected to continue into 2024, according to Wealth Insight data for Knight Frank. Whilst the capital continues to attract wealth from all over the world, last year there was a greater proportion of British buyers, up from 34% to 37% in the year to June.
Low interest rates and stable returns have attracted British investors and we anticipate that this will remain stable as property continues to outperform other investments. What is also evident is that there has been marked growth in younger buyers. The number of super-prime buyers in their 30s has more than doubled in the year to end June, up from 7.1% to 14.8%. A lot of younger wealthy individuals have made their money in tech and IT, but in addition, there are also the children of UHNWIs taking over the family wealth. As a result, we have seen an increase in younger clients coming to us with developments and private homes.
The growth in younger buyers has also brought about emerging new trends and tastes. These clients want more modern, flexible spaces designed for entertaining, with less formal areas. They are a highly technologically savvy sector and often look for state-of-the-art systems. The interiors tend to be more trend-led in terms of choice of colour palette and furniture but also need to reflect them as individuals and their lifestyle. They will buy a penthouse because it fits with their lifestyle, not because they want to have the most prestigious apartment in the building. The focus is on investment rather than a trophy home, but they also want it be very personal and fit with their lifestyle.
In addition to younger buyers, we also predict increased growth in other types of UHNWI’s. Property investors are becoming more diverse as emerging and developing markets grow, such as Vietnam. Female entrepreneurs are also on the rise, which is perhaps not surprising given that women invest proportionately more of their wealth in property than men, 16% vs 10%. The older wealthy will continue to invest in trophy assets to preserve wealth for future generations and we will also continue to see property traders come into the market. Traditionally these are Chinese and other Asian investors who buy off plan, rent out the property, keep it for a few years and then dispose of it when another area presents a more attractive investment opportunity.
Aside from the growing diversity of wealth, we are also seeing changes in consumer behaviour as consumers look to simplify. With everything they can possibly want within their reach, we have seen a move back to simpler solutions, especially for older clients. Not every client wants a fully automated home, some still want to be able to turn on a light switch. Our role is to make our clients lives easier and design their homes accordingly.
We are in a changing world and the shift in demographics has increased the diversity of the wealth market. What is important is that we adapt to this change so we can best fulfil our clients’ expectations. This is why we always develop a deep understanding of their needs and lifestyles from the outset, so that we can deliver a home that is uniquely personal and will be treasured for years to come.
In the final part of this series, I look at how the changing market has impacted ultra high net worth requirements in property and why getting the end product right is more important than ever.
Written by JB
Super-Prime Property Market View 2016 - Part Two
Super-Prime Property Market View 2016 - Part One
Maison & Objet January 2016: A Walk On The Wild Side