The global luxury home market is still doing well, considering it saw an 8% increase last year, but the world's wealthiest home buyers no longer seem to be swayed by the traditional markets in New York and London.
A new survey from Christie's International Real Estate shows home sales over $1 million declined in New York, Hong Kong, and even London. The top three fastest growing luxury markets in 2015 were Auckland, with a 63% increase in home sales over $1 million, along with Toronto at a 48% increase and Victoria, British Columbia at a 45% increase.
Christie's CEO Dan Conn provides a few theories for this shift, one of them being that investors are looking for markets that remain 'affordable' compared to primary markets and thus have more growth potential. For example, skiers who like Aspen end up in Jackson Hole, Wyoming instead, the sixth fastest growing market for home sales over $1 million.
New York, Hong Kong, and London all still remain at the top of the lists for average luxury home prices per square foot, with Hong Kong prices at an average of $3,000 per square foot. New York and London come with average luxury home prices at just under $2,000 per square foot. In the report, Christie's points to a record-breaking $194 million sale in Hong Kong as evidence that investors still see long-term value in these markets.
The average days luxury homes in the world's top markets also fell significantly. Globally, luxury homes took 195 days to sell, a 23% decrease from 2014. Hong Kong and London were the only two top luxury markets to see an increase in days on the market, with London increasing from 165 days in 2014 to 270 days in 2015.
There are several new drivers in the 'comeback' of luxury markets, but two primary reasons are the tech industry and the rise of millennial entrepreneurs. Outside of San Francisco's popular market, Portland saw a 40% increase in home sales over $1 million in 2015 - most selling in less than three months.