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Most wealthy hold $3 trillion in residential real estate assets

Nearly $3 trillion of the world’s private wealth is held in owner-occupied residential properties, a value greater than the GDP of India, a new report by Wealth-X and the Sotheby’s International Realty brand showed.

There are 211,275 ultra-high net worth (UHNW) individuals – defined as those with $30 million and above in net assets – in the world and 79 per cent of them own two or more residences.

Some of the main hubs for luxury residential real estate are New York City, London and Hong Kong, but niche locations – such as Lugano, the Hamptons outside New York City, and rural areas around the world – are gaining in popularity.

Luxury residential real estate is favoured by 17 per cent of UHNW individuals which inherited wealth

The Wealth-X and Sotheby’s International Realty Global Luxury Residential Real Estate Report forecasts that the ongoing shift in the wealth creation cycle from the West to the East, and the growing significance of intergenerational wealth transfers will have significant consequences on the luxury residential real estate market, with a noted emphasis on new developments and a change in investment grade cities.

Other key findings from the inaugural report show that the value of UHNW-owned residential real estate assets increased by eight per cent globally in 2014, and that over seven per cent of the world’s UHNW population made their wealth through real estate lat year, up from five per cent in 2013.

The report also found that luxury residential real estate is favoured by 17 per cent of UHNW individuals with inherited wealth, compared to just under nine per cent for self-made UHNW individuals.

Another key finding is that over six per cent of the world’s UHNW population relocated their primary residence to a different country from which they were born. These individuals often keep a secondary residence in their home countries, and India is the leading country in this respect.

Sotheby’s International is represented in Malta by CSB Real Estate Ltd.

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