The luxury property market is in continuous evolution – so is the role of the estate agent. In the past 10 years, two important trends have shaped the industry and changed the way the international property market works.
Firstly, even despite several years of global economic uncertainty, the percentage of foreign clients has grown significantly across all markets, and looking ahead, it is expected to grow further due to long term factors such as wealth redistribution, globalisation of trade and easier mobility….
Secondly, the search for properties has significantly shifted online, with property portals and other digital channels gradually replacing conventional print media.
This unstoppable trend is highlighting the importance of transnational collaborations among agents as well as pushing them to make use of international sales channels. While English is increasingly the dominant language, being familiar with other cultures and assisting the clients in other languages is crucial for a luxury agent.
Te Atrium (www.teatrium.net), an international portal for luxury homes and qualified professionals, has asked some of its partners to give their views on the power of the international property market and what we can expect from the rest of this year and beyond.
For Vitruve Associés, a luxury agency that operates in France and Switzerland, international clients represent more than 70% of property acquisitions above €4million. According to Thierry Journiac, founder and director at Vitruve “international demand will keep rising given the long-term increase, in both volume and value, of HNWI and UHNWI worldwide. Generally luxury property buyers look for a safe investment they can enjoy. With all their virtues, France and Switzerland naturally become their favourite destinations.”
Luxury residential properties are an asset class with an inherent low risk profile and in this time of market uncertainty they can be seen as a stable and tangible defensive investment. In addition they historically present good potential for capital gains and total returns, provided that the investment horizon is long enough to absorb transaction costs. This is particularly the case in those global hubs, like London, where this is a more liquid market and a higher price transparency.
For Caroline Copland at W.A. Ellis who deals with property in prime central London their “percentage level of applicants from abroad remains steady at around 60%, with much of this comprising the Middle East and former Soviet states. It is the apartment market that most benefits from international interest, as these are often kept as pied-a-terres, with porters and security of high importance.”
Tax, fiscal and residency policies may also have an impact on the demand side according to Tara Rajan, marketing director at Lucas Fox, who cover the Barcelona, Barcelona’s Coasts and the Islands property markets; “the amount of international buyers will increase when the proposed residency changes, which should be coming into effect at the end of this quarter, bringing more buyers from non-EU countries such as China, South Africa, India. Already 95% of our clients are international.”
Davide Ruggiero, founder of Te Atrium, also agrees that “Besides globalisation of trade and increased mobility, we are living in a time of significant wealth reallocation. From a property investment standpoint this fact will be even more evident in the future. For example, Russian and Arabic buyers have traditionally been among the biggest spenders on luxury property in Europe over the past ten years, but now we are observing the first wave of property buyers from mainland China and an increasing number from countries like India, Brazil and other emerging economies. In a few years there will no doubt be an increase in not only the number of buyer nationalities but also their level of sophistication and their approach to the purchase of luxury goods”.
Source/ Photo Credit: Te Atrium