State of Luxury Real Estate

KILAUEA, HAWAII, USA | $9,000,000
SOLRE 2022
STATE OF LUXURY
REAL ESTATE
HOMEOWNERS TO THE RESCUE: LUXURY SELLERS RACE TO MEET DEMAND
©2022 Luxury Portfolio International.®

All rights reserved. Unauthorized use of this members-only document is prohibited
Table of Contents
President’s Welcome 4
Executive Summary 6
Methodology 7
Survey Details 8
Definitions 9
Consumer Mindset in Luxury Buying 10

Luxury Buyers: Frame of Mind 11
#1 Confident in Their Personal Economy 12
#2 Discretionary Spending Power Could be Tested 13
#3 Luxury Buyers Experiencing FOMO Over a Frothy Luxury Real Estate Market 14
#4 COVID-19 Disruptions: Adjusting to a New Way of Life 15
#5 Anxiety Over Unquantified Risks 16
#6 Sustainability: Mitigates Risk from Climate Change 17
#7 Speaking of Anxiety and Disruptions: Working From Home Adds to the Stress 18
The Market for Luxury Real Estate 2022 19

The Wider Affluent Residential Market: Ending the Year With a Backlog of Buyers 20
2022 is Primed to be a Strong Year Among Affluent Buyers 21
Luxury Homeowners Come Around to Selling 22
Luxury Buyers: From a Frenzy to a Roar, Buyers and Sellers Come Closer Together 23
Forecast: Global Price Stabilization and Balance in Supply and Demand 24

All rights reserved. Unauthorized use of this members-only document is prohibited LUXURY SELLERS R AC E TO MEET DEM AND | 2
Table of Contents
Buyer Trends in 2022 25

Welcome in a New Class of Entry-Level Luxury Buyers 26
A Behavioral Shift Impacting Traditional Brokerages: Video Conferencing 27
Cities are Set to Rebound 28
Where in the World: Top Cities for Luxury Home Buyers 29
Single-Family Homes Surge in Popularity 30
Investors Dive into Single-Family Homes 31
Sustainability: Critically Important and Worth Paying to Get 32
Conscientious Purchasing Achieves Two Primary Goals: Moral Right and Financial Savings 33
Sustainable Home Design Elements Favor Technology, Materials 34
Luxury Features and Amenities Essential in the Next Residence 35

Top Outdoor Living Features/Amenities Essential in Next Residence 36
Top Kitchen Features/Amenities Essential in Next Residence 37
Top Entertaining Features/Amenities Essential in Next Residence 38
Top Security Features/Amenities Essential in Next Residence 39
Top Specialty Room/Living Spaces Essential in Next Residence 40
Conclusions and Recommendations 41

BURIEN, WASHINGTON, USA | $3,495,000
PRESIDENT’S
WELCOME

President’s Welcome
STATE OF I am pleased to present you with the State of Luxury Real Estate 2022 global study by
Luxury Portfolio International.® After an incredible period for luxury real estate, it seems some
LUXURY balance will be restored in the year ahead. More sellers are entering the market and many
buyers have already made their purchases. In this environment, we expect prices to begin
REAL stabilizing, demand will remain strong and a healthy, new normal in luxury real estate can
ESTATE start to take hold.
SOLRE 2022 Three things stand out most from reviewing the SOLRE 2022 report’s data and insights.
First, consumers face many worries but do not control the outcome. They must instead focus
on what they can control, which means being brave enough to make a significant purchase
in the face of uncertainty. Next, the digital age is once again disrupting the luxury real estate
industry. Consumers have adapted to a digital life — nearly all of them, nearly all at the same
time. As Instacart brings us groceries and Amazon brings us everything else, consumers have
fallen in love with the time savings and convenience of online shopping. After nearly two
years of COVID-19 protocols, buyers are increasingly comfortable keeping their distance
and transacting via FaceTime and DocuSign. Finally, single-family homes are in high demand.
We can also expect a new bidder in desirable neighborhoods: investors looking to turn a profit.
For his sharp reading of the tea leaves, many thanks to Chandler Mount, CEO of Affluent
Consumer Research Company, and principal researcher for Luxury Portfolio International.
We hope this report will help you make smarter decisions as a luxury real estate professional
in yet another year where health drives wealth.
Mickey ALAM KHAN

President, Luxury Portfolio International

Executive Summary
What happened in 2021? bring psychological pricing into the mix, beyond what normal market conditions
may demand.
Demand surprised. Prices soared. Buyer demands have not changed on the basics: location, quality, and well-run,
Time-on-market shrunk. family friendly places to live. Remote work and the accompanying frustration and
stress of being in the home a lot continues to play a significant role in the purchase
Inventory evaporated. decision process. COVID-19 remains a significant concern and is a motivating factor
for buyers looking to purchase in the next 12 to 15 months, but the market has
Up next in 2022? Owners are incented to sell. The mass of buyers has gotten smaller, already accounted for its effects. It no longer appears to be a significant driver of
but still outnumbers the available market. Psychologically the game is still on. behavior, even if it is the underlying reason for the change. People are managing
their daily lives to remain productive and happy; they are not, in general, making
The market for luxury real estate remains strong after a record year of sales in many hasty decisions like they may have a year ago. Buyers therefore are looking at
locations. Supply, demand, and price are all showing signs of normalizing suggesting sustainability as a differentiator in luxury homes. Most consider it a criterion in a next
the year ahead will be an active one. luxury home purchase, and many expect to pay a premium to have the features and
amenities that prepare them for the future.
For luxury sellers, the strongest motivators are economic. They expect their home to be
at-or-near peak value, and that economic conditions are stable enough to move forward The battle between traditional luxury real estate brokerages and online upstarts is
with a deal and yet unpredictable enough to make it worth their while to cash out. intensifying. As consumers learned to go online for everything last year, a growing
number see the value in buying a home this way. Fueling that trend is the increased
From the luxury buyer POV, the market is even more competitive than last year, with comfort with buying a home sight-unseen, and this is especially true for international
backlogged, delayed and frustrated buyers chomping at the bit to buy their next buyers and long-distance purchases like a vacation home. Brokers and agents ahead
property. The buyer who is planning to spend the most also fears they missed their of the curve with experiential technology will develop more resilient relationships for
opportunity to take part in this market. This fear of missing out (FOMO) will years to come.

NORTHFIELD, ILLINOIS, USA | $3,650,000
METHODOLOGY

Methodology
Survey Details
Affluent Consumer Research Company sourced survey participants from affluent Total Global
Luxury Buyers
USD
neighborhoods in cities and towns in 20 countries around the world. In total,
4,673 interviews of global affluent consumers yielded a sample of 1,155 luxury home
Completed Affluent $1 Million
buyers in the next 3 years. Interviews or More
Affluent Population Estimate:
31.9 million households Asia Pacific 1,482 425

±2% margin of error
at the 95% confidence level
North America 2,093 393
Europe/Middle
East 1,098 337
If the study were conducted 100 times we would expect that in 95 cases the results would fall within 2% of the data presented here.
Grand Total 4,673 1,155
Indices presented in this report are combinations of scaled questions. In all cases the scale runs from 0 to 100 with higher scores
indicating greater interest/acceptance of the idea. Items at or above 50 indicate moderate to strong acceptance.

Methodology
Definitions Within This Report Regions Surveyed

Global Affluent North America
The total sample across all regions. Highest income earners per Canada | Mexico | United States
country; approximately the top 5 percent by income.
Europe
Luxury Buyers France | Germany | Italy | Spain | United Kingdom
Affluent consumers in the market to purchase residential real estate
worth approximately USD $1 million or more in the next 3 years. Middle East*
Saudi Arabia | United Arab Emirates
Luxury Sellers
Affluent consumers who own a primary home worth approximately Asia
USD $1 million or more, and in the market to sell in the next 3 years. China, Taiwan and Hong Kong*
South Korea | Japan | India
Pacific
Singapore | Indonesia | Australia | New Zealand
*New in SOLRE 2022.

DUBLIN, IRELAND | EUR €14,000,000
CONSUMER MINDSET
IN LUXURY BUYING
STARTING WITH THE WHY BEHIND THE WHAT

Consumer Mindset in Luxury Buying
Luxury Buyers: Frame of Mind

The SOLRE 2022 research has identified six primary motivators for seeking a new residence. These reasons often do overlap in the real world, but
we have analyzed response patterns and created separate groups that are “primarily motivated” by the following reasons.
Reasons in the Market for a New Residence | LUXURY HOME BUYERS
Better Place To Live Investment Property Better Location Settling Down & Better Run City/Town Next Chapter in Life
UPGRADE NEIGHBORHOOD RENTAL INCOME BETTER WEATHER Nesting LOWER TAXES MOVING FOR CAREER
UPGRADE LIVING SPACE CAPITAL GAINS BETTER VIEW MORE PRIVACY BUSINESS ENVIRONMENT CLOSER TO FAMILY
OR SETTING STARTING A FAMILY CRIME CHILDS EDUCATION
PERCENT FOR WHOM EACH FACTOR IS A PRIMARY DRIVER IN THEIR LUXURY RESIDENCE PURCHASE
19% 35% 13% 13% 10% 10%

MEDIAN PRICE PER SQUARE FOOT (IN USD)
$583 $750 $833 $833 $917 $972
TOP QUARTILE PRICE PER SQUARE FOOT (IN USD)
$917 $1,167 $1,167 $1,500 $1,833 $1,833

PERCENT CHANGE IN HOME VALUE FROM CURRENT TO NEXT PRIMARY HOME1
68% NA 47% 58% 60% 67%
1
Estimated by comparing the value of their current primary home to the budget for their next primary home. Does not include second/vacation or investment property buyers. A 50% increase in home value would be like trading up from a USD $1 million home to a
USD $1.5 million home.

#1 Confident in Their Personal Economy uxury buyers are

L
coming to [our market]
because of business
As remarked for many years, luxury buyers enjoy a heightened level of personal financial confidence, compared to
freedoms, low or no
the average affluent consumer (74 percent on average compared to 69 percent for all other affluent consumers).
taxes, and appreciating
Highly educated, savvy in finances and management, this consumer is often very well prepared for what comes their
prices. New residents
way. With luxury buyers, their confidence contributes to their mindset: buyers moving into the next chapter in life or
are key in our market.
seeking a better-run city are feeling more confident than people buying for other reasons.
— Luxury Portfolio Member
Average Level of Confidence in Household Financial Strength (0–100 Very Confident) | LUXURY BUYERS
74% 73% 74% 75% 77% 78%

Nesting

#2 Discretionary Spending Power Could be Tested Buyer Insight: The primary

issue facing governments,
consumers, and the luxury real
Affluent consumers at all stages and mindsets are aware that their ability to spend money could be tested,
estate market — is the continued
and soon. This test comes in the combination of increased taxes, slower economic growth (affecting income
ability for private individuals
and capital gains), and currency devaluation (as higher interest rates and lower purchasing power of money).
to spend their wealth on the
things they want. Luxury buyers
Percent Select: Significant Concern in the Coming Year | IN THE MARKET TO BUY NEXT 3 YEARS
of all mindsets share in this
concern, especially those buying
g LUXURY BUYERS g NON-LUXURY BUYERS
investment properties.
CONCERNS BY LUXURY
PURCHASE MINDSET
g INVESTMENT PROPERTY
g PERSONAL USE
75% 77% 34% 39% 25% 33% 25% 36% 25% 27% 26% 28% 30% 22% 31% 24%
ABILITY TO SPEND TAX INCREASE RECESSION PURCHASE POWER STOCK MARKET INTEREST RATES STOCK MARKET INTEREST RATES
(NET) IN DECLINE GROWTH SLOWS GROWTH RISE
SLOWS

#3 Luxury Buyers Experiencing FOMO Over a Frothy Luxury Real Estate Market
Fear of missing out (FOMO) is the feeling of anxiety that an exciting or interesting event may currently be happening elsewhere, Buyer
often aroused by posts seen on social media. With a year at home and headlines touting the hot market, this has become a Insight: As LPI
significant concern for 26 percent of luxury buyers. FOMO manifests in different ways, first as a true “missed the boat” moment members have
where prices extend beyond reach. A second concern — equally impactful — is arranging finances for major purchases. noted in many
geographies the
Percent Select: Significant Concern in the Coming Year | LUXURY BUYERS land, the building,
and the materials
g FEAR OF MISSING OUT (NET) g ARRANGING FINANCING FOR MAJOR PURCHASES g REAL ESTATE PRICES WILL BE UNAFFORDABLE FOR PEOPLE LIKE ME all cost more
than normal. This
extends beyond
real estate but
harkens back
to concerns
over weaker
purchasing power
and rising
interest rates.
23% 10% 15% 25% 9% 20% 22% 10% 11% 31% 24% 11% 15% 9% 8% 41% 22% 23%
Nesting

#4 COVID-19 Disruptions: Adjusting to a New Way of Life Buyer Insight: Buyers seeking a better
location with concerns for COVID-19 are
often motivated to act in the near term and
It is clear that COVID-19 is not behind us as we begin 2022, and half have a significant concern that
have relatively high purchase budgets. This
it will disrupt their life again in the coming year (50 percent of luxury buyers). This is a motivator for a
bodes well for areas serving international
sooner timeframe-to-purchase as buyers want to be settled in case of delay in the future. Investment
clients and those in “perfect” areas with
property buyers are particularly concerned about the impact for financial reasons. Whether buying
great weather and views.
in a vacation spot or downtown, the potential for restrictions increases the perceived risk of the deal.
Percent Select: Significant Concern in the Coming Year | LUXURY BUYERS
g COVID-19 DISRUPTION (NET) g COVID-19 SHUTDOWNS g BECOMING VERY SICK WITH COVID-19 g LOSS OF INCOME DUE TO COVID-19
48% 26% 21% 19% 52% 29% 26% 23% 35% 25% 7% 9% 53% 27% 21% 20% 52% 33% 19% 19% 58% 35% 30% 27%
Better Place To Live Investment Property Better Location Settling Down & Nesting Better Run City/Town Next Chapter in Life

#5 Anxiety Over Unquantified Risks Buyer Insight: Many affluent consumers

equate luxury with relaxation. They derive
satisfaction from experiences when their
Luxury buyers are not immune to feeling anxiety over the future (57 percent select one or more).
needs are anticipated, they are treated
One anxiety they dislike the most is not having a clear picture of what will happen next. This
kindly, and guided confidently throughout
consumer thrives on predictability, planning and feeling in control of what happens to them. Of these
a process.
three concerns, only climate change impacting my property has an actionable and satisfying
path toward resolution. In fact, as this concern grows so too does the budget for their next home.
g FUTURE RISKS (NET) g WORSENING ECONOMIC INEQUALITY g CHILDREN’S FUTURE g CLIMATE CHANGE IMPACTING MY PROPERTY
64% 31% 30% 25% 60% 31% 30% 19% 45% 25% 21% 13% 57% 29% 24% 24% 51% 22% 22% 26% 62% 24% 34% 32%

#6 Sustainability: Mitigates Risk from Climate Change Buyer Insight: The intention to buy
sustainable housing for the long term is
a strong endorsement for including these
Most luxury buyers are choosing their next home with environmental sustainability in mind
features in marketing materials and
(75 percent), and this buyer is thinking for the long-term. Luxury buyers seeking sustainability
encouraging developers and renovators to
features and amenities are 71 percent more likely than non-seekers to consider this purchase
keep these themes central in future plans.
as a legacy home that will be passed on to heirs. Further, as interest in sustainability grows the
quality of buyer improves: they want to transact sooner and for relatively higher budget.
Percent Select Yes: Does Environmental Sustainability Factor Into Your Home Search Criteria | LUXURY BUYERS
63% 81% 56% 83% 79% 90%
Nesting

#7 Speaking of Anxiety and Disruptions: Working from Home Adds to the Stress
The top trend in luxury real estate last year was finding a home that works for the family that works from home. Today, 27 percent of luxury buyers
cite it as a significant concern. For buyers concerned about de-stressing the house it is important to fill it with plenty of diversions. This includes
entertainment at home, night life nearby, and relaxation-inducing amenities like a spa/hot tub, a specialty cocktail scale, and specialty rooms for
media and gaming.
g WORKING FROM HOME (NET) g EXCESSIVE FAMILY STRESS DUE TO WORKING FROM HOME g REMOTE WORK
4%
29% 20% 14% 26% 19% 12% 12% 8% 33% 13% 23% 30% 14% 20% 35% 21% 22%

NEW CANAAN, CONNECTICUT, USA | $3,499,000
THE MARKET FOR

LUXURY REAL ESTATE
BUYERS AND SELLERS HEADING TOWARD EQUILIBRIUM

The Market for Luxury Real Estate 2022
The Wider Affluent Residential Market:

Ending the Year with a Backlog of Buyers
Globally the affluent class remains highly interested in purchasing residential real estate. Year-on-year there is a
33 percent increase in the number of people who plan to buy within the coming year (32 percent up from 24 percent
worldwide). This “present-tense oriented” consumer has residential buying top of mind.
Overall, 2021 was an active year for luxury home buyers, with 912,000 households exiting the market. This sets up
2022 to be another very strong year for luxury real estate.
Percent in the Market to Purchase Residential Real Estate (Any Price) | GLOBAL AFFLUENT
g 2021 SURVEY g 2022 SURVEY

Affluent Households in the Market for
Residential Real Estate Within 3 Years
(Millions of Households)
2021
SURVEY 15.51
5% 2022
24% 32% 17% 9% 10% 49% 55% SURVEY

14.60
BY END OF NEXT YEAR THE FOLLOWING YEAR THREE YEARS OUT MORE THAN THREE YEARS
NOT IN THE MARKET

2022 is Primed to be a Strong Year Among Affluent Buyers

Zooming in on the year ahead, 2022 should show growth across all markets, with Europe and Asia Pacific garnering the greatest increases.
Affluent consumers from Saudi Arabia and the UAE have the greatest interest in acquiring residential real estate. Luxury buyers make up
around half the market in each region.
Percent in the Market to Purchase Residential Real Estate by End of Next Year (2022) | AMONG THE GLOBAL AFFLUENT
g 2021 SURVEY g 2022 SURVEY
New
in
30 37 21 25 19 39 2022 46
ASIA PACIFIC NORTH AMERICA EUROPE MIDDLE EAST

Luxury Homeowners Come Around to Selling We are running very low on inventory
because there is not enough new
product that has been built in the
With new construction experiencing delays — and outright stoppages — there has been increasing
last 10 years. Our average contract
interest for existing homes. However, owners were not necessarily ready to sell last year. This lack of
time is 17 days and prices are 30
inventory has been a significant price driver in most luxury markets. Now, it seems that luxury owners
percent higher.
are convinced that the iron is hot and their interest in selling has increased by more than double
— Luxury Portfolio Member
(to 28 percent from 11 percent). In fact, 71 percent of owners believe their home value will increase
this year, creating a strong incentive to sell. The average luxury homeowner expects an increase of
approximately four to five percent compared to three to four percent last year. Expected Change In Current Home
Value in the Next 12 Months
Percent in the Market to Sell Residential Real Estate | CURRENT LUXURY HOME OWNERS CURRENT LUXURY HOME OWNERS
g 2021 SURVEY g 2022 SURVEY g INCREASE IN VALUE g NO CHANGE

g DECREASE IN VALUE g NOT SURE
3% 2%
11% 10%
23% 16%
11% 28% 17% 10% 11% 7% 61% 55% 63% 71%

BY END OF NEXT YEAR THE FOLLOWING YEAR THREE YEARS OUT MORE THAN THREE YEARS 2021 SURVEY 2022 SURVEY
NOT IN THE MARKET

Luxury Market: From a Frenzy to a Roar, Buyers and Sellers Come Closer Together
As affluent consumers participate in the residential market, luxury-residence seekers are down 38 percent this year (from 34 percent to
20 percent of the total affluent). In this delicate balancing act, the number of luxury sellers is on the rise by 26 percent (up to 16 percent from
13 percent). The perception, however, is that the luxury market is getting stronger, with more buyers coming to the table.
Psychologically it remains a sellers market. In practice, we can expect a more balanced ratio of buyers and sellers in the year to come.
Percent in the Market to Purchase/Sell Residential Real Point of View on Luxury Residential Real Estate Market
Estate For USD $1 Million or More, Next Three Years We have more space than I expected
GLOBAL AFFLUENT LUXURY BUYERS AND SELLERS
g 2021 SURVEY g 2022 SURVEY g GETTING STRONGER g GETTING SOFTER g NOT CHANGING g DON’T KNOW
3% 5% 2% 5%
21% 23% 17% 20%
31% 21% 35% 22%
45% 52% 46% 53%

34 20 13 16
% OF TOTAL PURCHASING LUXURY % OF TOTAL SELLING LUXURY 2021 LUXURY BUYERS 2022 LUXURY BUYERS 2021 LUXURY SELLERS 2022 LUXURY SELLERS
Incidence of Luxury Buyers and Luxury Sellers among the Global Affluent Getting stronger (more buyers), Getting softer (more sellers)

Detailed Findings
Forecast: Global Price Stabilization and Balance in Supply and Demand

In 2021, the growth rate for the affluent class slowed 2021 SURVEY 2022 SURVEY PERCENT
compared to prior years. The number of households in the CHANGE
highest earning segment grew by five percent, a slower
Affluent household population estimate 30.5MM 31.9MM +5%
rate than the typical 10 percent per annum average in the
decade since the Great Recession of 2008. Next three-year (N3Y) buyers 15.5MM 14.60MM -6%
As we look ahead to 2022–2024 the market of potential Incidence of buyers among total affluent 51% 46% -10%
buyers is projected to be nine percent smaller than In the market to buy a luxury2 residence N3Y 10.3MM 6.4MM -39%
estimated last year. At its face a decline seems like
bad news, but the reality is that 2021 was a very strong Incidence of luxury among all affluent buyers 66% 44% -34%
year for sales in many markets. And still, over 14 million
Luxury home buyers as a percent of total affluent 34% 20% -58%
affluent households remain interested in buying a
residence of which 6.4 million are in the luxury category. Next three-year sellers 10.3MM 11.7MM +14%
As the buy-side cools, an additional 1.2 million luxury
Incidence of sellers among total affluent 34% 37% +9%
homeowners have found an interest in selling in the
next three years, up 32 percent from last year. Record Luxury homeowners 17.3MM 18.1MM +5%
valuations no doubt play a key role in this decision.
In the market sell a luxury residence N3Y 4.0MM 5.2MM +32%
Working together, these factors indicate global price Luxury home sellers as a percent of total affluent 13% 16% +26%
stabilization and market normalization is in store for 2022.
What once appeared to be a wide chasm between the
number of potential buyers and sellers (10.3MM buyers and
4.0MM sellers in the 2021 survey) is moving significantly
closer toward equilibrium (6.4MM buyers and 5.2MM sellers). 2
Luxury residence defined as USD $1 million or more

CAPE TOWN, SOUTH AFRICA | ZAR R65,000,000
BUYER TRENDS IN 2022

NEW DEVELOPMENTS OVER THE PAST YEAR

Buyer Trends in 2022
Welcome in a New Class of Price Range for Next Home | In the Market Next Three Years
Entry-level Luxury Buyers TOTAL AFFLUENT LUXURY BUYERS
EUROPE/
2021 2022 2021 2022 ASIA NORTH
MIDDLE
Across the full spectrum of affluent consumers, SURVEY SURVEY SURVEY SURVEY PACIFIC AMERICA
EAST
there is greater interest in purchasing real estate
under USD $1 million. This signals a resurgence of upper- Under USD $500K 11% 19% — — — — —
middle class buyers either those who were delayed
$500K under $999K 23% 34% — — — — —
in purchasing last year, or who are now willing and
able to acquire. Consequently, this is creating a modest $1MM to $1.9MM 26% 21% 39% 44% 39% 57% 37%
increase in the number of entry-level luxury buyers,
up to 44 percent from 39 percent in the USD $1–1.9MM $2MM to $2.9MM 15% 8% 23% 18% 22% 11% 21%
range. All told, the year-on-year budget level is stable $3MM to $4.9MM 11% 6% 17% 12% 15% 10% 12%
within luxury, at a median price of USD $2.25 million.
$5MM to $9.9MM 10% 8% 15% 17% 14% 14% 24%
This democratic luxury-for-the-many effect is most
$10MM or more 5% 4% 7% 8% 10% 8% 7%
pronounced in North America and less so in Asia Pacific
and Europe/Middle East, where the wealthy class tends Average 2.6MM 2.2MM 3.6MM 3.8MM 3.8MM 3.4MM 4.1MM
to skew toward relatively small groups of people with
Median 1.75MM $1.25MM 2.25MM 2.25MM 2.25MM 1.75MM 2.25MM
very high concentrations of wealth.
Average square feet3 — 2,973 — 3,670 3,427 3,904 3,710
Average price per sf4 — $420 — $613 $657 $448 $606
3
sked in categories in both square feet and square meters. Median values between categories used to calculate average size.
A
4
Average price per square foot is calculated as median price point divided by median square feet

A Behavioral Shift Impacting Traditional Brokerages: Buyer Insight:

The trend of virtual
Video Conferencing home buying is not
confined to international
With so many people becoming used to Zoom calls and long-distance everything, we find an uptick in the interest in purchases. 32 percent
using online agencies to purchase luxury real estate. Additionally, 40 percent of luxury buyers are willing to buy a home of primary home buyers
without visiting it in person first. These two forces combined are increasing the pressure on traditional brokerages and 53 percent of
and agencies to stand out. Read on for more information; the short answer is the network, the product, and the vacation home buyers
fundamentally better service that can be provided is what separates digital and human agents for luxury buyers. would be willing to buy
without a visit.
Percent Select: Type of Agency Most Likely to Use | LUXURY BUYERS
g 2021 SURVEY g 2022 SURVEY Would Buy a Residence Without

Personally Visiting, 2022
g YES
g NO
g NOT SURE
7%
40%
9% 53%
8% 4%
70% 61% 19% 26% 2%
TRADITIONAL AGENCY ONLINE AGENCY NOT SURE NOT APPLICABLE —
NO AGENCY

Cities are Set to Rebound

Over half of luxury buyers worldwide (55 percent) expect to buy their next residence in a city and 77 percent will be within commuting range.
Notably, Asia-Pacific luxury buyers are significantly more likely to buy in the city center than their global counterparts. There is little variation
in suburban and ex-urban living, but second/vacation home settings are more popular with buyers in North America and Europe/Middle East.
As next home budgets increase, there is a stronger draw to being part of the city center (36 percent spending USD $2 million or more compared to
28 percent spending USD $1–1.9 million).
Type of Neighborhood for Next Home | LUXURY BUYERS
Percent Selected by Region Percent Selected by Budget
15% 9% 14%
5% 21% 17% 16%
8% 9% 8%
19% 9% 11%
22% 18%
22% 25%
23% 25%
23% 24%
23% 22%
22%
44% 36%
32% 23% 26% 28%
LUXURY BUYERS ASIA PACIFIC NORTH AMERICA EUROPE/MIDDLE EAST $1M TO $1.9M $2M+
g IN THE CITY CENTER g IN THE CITY BUT OUTSIDE THE CENTER g RESIDENTIAL AREA OUTSIDE THE CITY g LOW-DENSITY AREA FAR AWAY FROM A CITY
g A SECOND HOME OR VACATION SETTING

Where in the World: Top Cities for Luxury Home Buyers

Where do you Expect to Move to? | LUXURY BUYERS
NORTH AMERICA EUROPE MIDDLE EAST ASIA PACIFIC

United States France Saudi Arabia China Singapore
NEW YORK PARIS RIYADH BEIJING EAST COAST
LOS ANGELES MARSEILLE United Arab Emirates GUANGZHOU Australia
SAN DIEGO Germany DUBAI SHANGHAI MELBOURNE
Canada BERLIN ABU DHABI Hong Kong SYDNEY
TORONTO STUTTGART HONG KONG New Zealand
Mexico Italy TORONTO AUCKLAND
MONTERREY MILAN NEW ZEALAND
Indonesia
CANCUN ANCONA Taiwan JAKARTA
ROME TAIPEI BALI
Spain TAICHUNG
MADRID HUALIEN
United Kingdom Japan

LONDON TOKYO
South Korea
SEOUL (GANGNAM)
India
DELHI
MUMBAI

Single-family Homes Surge in Popularity Buyer Insight:

Space makes the
difference these days.
The thoroughly North American single-family home is branching out across the globe, as 40 percent of
Space from neighbors,
Europe/Middle East buyers and 29 percent of Asia-Pacific buyers are seeking the luxury of additional space and
space in the home, and
privacy. Year on year, demand for this type of housing is increasing as, collectively, shared living spaces are becoming
space outside.
less attractive to the luxury buyer. North America remains the top driver for demand of this type of residence.
Type of Residence Expect to Buy | LUXURY BUYERS
Percent Selected, Global Percent Selected, by Region

g 2021 SURVEY g 2022 SURVEY g SINGLE-FAMILY HOME g CONDO/APT g TOWNHOUSE
g PENTHOUSE g HOTEL/RESORT RESIDENCE
7% 5% 8%
10%
20% 17%
11%
11% 15%
23%
19%
20%
62%
40%
37% 44% 17% 17% 18% 17% 18% 16% 10% 7% 29%
SINGLE-FAMILY CONDO/ TOWNHOUSE HIGH-RISE HOTEL RESORT ASIA PACIFIC NORTH AMERICA EUROPE/MIDDLE
HOME APARTMENT PENTHOUSE RESIDENCE EAST

Investors Dive Into Single-family Homes Buyer Insight:

A similar strategy may
be at play with wealthy
As observed last year, the sentiment toward real estate as an investment was quite strong, and its performance
investors who have an
is drawing buyers to the market. An additional 25 percent of buyers are buying with returns in mind (35 percent
advantage in a competitive
up from 28 percent). What makes this year different from last is the type of home being purchased as an investment.
market (cash plus access
We find that investors are shifting away from high-rise and resort residences and instead are focusing on single-
to cheap debt) and can
family homes. While it is not clear what is driving the shift, companies like Invitation Homes have made headlines
see appreciation quickly
from buying up middle-class housing at scale and making it available for rent and pocketing the difference.
in many cases.
Planned Use For Residence | LUXURY BUYERS
Percent Selected, Global g 2021 SURVEY g 2022 SURVEY Percent Selected by Investment Property Buyers 2021 SURVEY
g
g 2022 SURVEY
10%
72% 65% 33% 31% 19% 17% 20% 17% 28% 35% 29% 41% 27% 22% 15% 16% 18% 15% 6%
PERSONAL USE PRIMARY SECONDARY VACATION INVESTMENT SINGLE-FAMILY CONDO/ TOWNHOUSE HIGH-RISE HOTEL RESORT
RESIDENCE RESIDENCE RESIDENCE RENTAL PROPERTY HOME APARTMENT PENTHOUSE RESIDENCE

Sustainability: Critically Important and Worth Paying to Get Buyer Insight: The trend
toward a sustainable home
is strongest with the luxury
Luxury home buyers demonstrate their commitment to environmental sustainability in their opinions and actions.
buyer, however non-luxury
Nearly 90 percent believe taking steps toward sustainability is worth doing, and 50 percent are willing to pay
buyers are also invested
more for the features they care about. This trend is evident in residential real estate as well as other luxury
in this concept. The fact
durables like automobiles, electronics, and apparel. Even luxury consumables like travel, food and beverage,
that affluent consumers
and services are working hard at doing good while also being good.
globally are leaning into
the trend suggests it will be
with us for the long haul.
What are Your Views On Environmental Sustainability? | LUXURY BUYERS
Percent Selected, Percent Selected, Willing To Pay...

Sustainability Actions Are… 2% For Sustainability Features I Care About
3%
g CRITICALLY IMPORTANT
g GOOD BUT DO NOT NEED
9% g
g
PAY MORE
PAY LESS
MAJOR CHANGES g PAY THE SAME
g NOT NECESSARY AT ALL
23% g NOT SURE 36%
g NOT SURE
50%
66%
11%

Conscientious Purchasing Achieves Two Primary Goals: Buyer Insight:

It is time to believe that
Moral Right and Financial Savings affluent consumers care about
the wellbeing of the planet.
Delving into the motivations behind buying an environmentally sustainable luxury home, we find two primary Motivations align with opinions
drivers: cost savings in the form of tax incentives, less maintenance, and lower operating costs is rivaled and actions — in other words,
by a values-based decision that it is the ethical choice and is better for the planet to do so. These primary they put their money where
factors are held above all others in each region surveyed with only minor variations. For example, in North their mouth is on this subject.
America the role of influence is less pronounced when compared to Asia-Pacific and Europe/Middle East Treat it as seriously as any
buyers. There are clear differences by age of buyer with those Under 50 more likely to be motivated by other rational decision.
influence and status associated with having a sustainable, modern home. They also put more emphasis on
the future, citing children and grandchildren as their reasons for this new style of living.
Percent Select as a Motivation to Have a Sustainable Home | LUXURY BUYERS
g ETHICAL/BETTER FOR THE ENVIRONMENT g FINANCIAL INCENTIVES g CHILDREN OR GRANDCHILDREN g INFLUENCED BY SOMEONE ELSE g TO INFLUENCE OTHERS
60% 58% 39% 39% 32% 62% 60% 39% 40% 40% 62% 58% 38% 31% 22% 56% 54% 39% 45% 35% 59% 56% 42% 41% 34% 65% 65% 19% 23% 25%
LUXURY BUYERS ASIA PACIFIC NORTH AMERICA EUROPE/MIDDLE EAST UNDER 50 50 AND OLDER

Sustainable Home Design Elements Favor Technology, Materials

Smart home automation and related technologies, efficient designs, appliances and building materials are the most in-demand aspects of
sustainable home design. This speaks to not only the foundational elements of the home, but also the design sensibility toward technology
and efficiency. Buyers from Asia Pacific show a higher-than-usual interest in Solar panels, and the use of non-toxic materials in the home. North
America leans toward organic living, that is having a vegetable garden or orchard and composting on property. In Europe/Middle East, the luxury
buyer is interested in locally sourced materials whenever possible. While this speaks specifically to design elements, the sense is that it would also
pertain to art and style elements as well.
Which of These Sustainable Home Design Elements, if any, are Essential in Your Next Residence? | LUXURY BUYERS
g SMART HOME AUTOMATION g ENERGY EFFICIENT APPLIANCES g NON-TOXIC MATERIALS g ORGANIC LIVING g LOCAL MATERIALS g SOLAR PANELS
73% 70% 43% 38% 36% 32% 79% 72% 47% 39% 36% 36% 72% 72% 39% 38% 30% 31% 65% 65% 42% 37% 43% 28%
LUXURY BUYERS ASIA PACIFIC NORTH AMERICA EUROPE/MIDDLE EAST

SALUDA, NORTH CAROLINA, USA | $1,000,000
LUXURY FEATURES AND

AMENITIES ESSENTIAL
IN THE NEXT RESIDENCE
OUTDOOR LIVING, ENTERTAINING SPACES, AND A SEPARATE KITCHEN JUST FOR THE DISHES

Luxury Features and Amenities Essential in the Next Residence
Top Outdoor Living Features/Amenities Essential in Next Residence

LUXURY ASIA NORTH EUROPE/
BUYERS PACIFIC AMERICA MIDDLE
HOME EAST ercent is significantly
P
Outdoor Room: Comfortable seating, Fire or Outdoor heating 64% 62% 70% 61% greater than
non-luxury buyers
Outdoor kitchen or bar 58% 52% 67% 56%
ercent is significantly less
P
Grass/yard 40% 38% 42% 40%
than non-luxury buyers
Wireless internet 39% 43% 40% 34%
Patio/terrace 37% 36% 42% 32%
Smart technology 34% 35% 35% 33%
Private calm or quiet spaces 33% 40% 26% 31%
Pool 31% 23% 37% 32%
Vegetable or flower gardening area 28% 34% 25% 25%
Workshop or studio 20% 21% 18% 20%
Cottage/cabana residence 17% 18% 15% 20%
None of these 2% 2% 1% 1%

LUXURY HOME ASIA NORTH EUROPE/

BUYERS PACIFIC AMERICA MIDDLE EAST
Top Kitchen Lots of natural light 40% 39% 48% 30%
Features/ Large island for preparation and seating

Eat-in kitchen
34%
29%
28%
26%
44%
35%
29%
27%
Amenities Smart refrigerator (plan meals, track freshness) 29% 38% 22% 26%
Essential in Kitchen opens to entertaining area 29% 18% 41% 27%
Next Residence Smart dishwasher (views from inside the appliance, stats on cleanliness) 26% 28% 25% 24%
Built-in smart coffee machine
ercent is significantly
P (voice assistant enabled creates custom coffee beverages) 22% 26% 17% 22%
greater than Temperature and humidity-controlled cabinets 21% 22% 21% 17%
non-luxury buyers
Dark and cool storage for fruits and vegetables 20% 28% 15% 15%
P Air fryer/table-top convection oven 19% 28% 11% 18%
than non-luxury buyers
Smart Instant Pot (voice assistant recipes, adjust setting on the app) 19% 21% 17% 17%
Induction cook tops 19% 25% 10% 22%
Smart blender (recipes, settings and blending times on the app) 17% 17% 14% 21%
Meat thermometer (real time temperature while you cook) 15% 11% 17% 16%
Cocktail scale (recipes, pour monitoring, timed shake/stir) 13% 13% 13% 13%
Precise digital food scale 12% 12% 9% 15%

Top Entertaining Features/Amenities Essential in Next Residence

HOME PACIFIC AMERICA MIDDLE
BUYERS EAST ercent is significantly
P
greater than
Home gym/fitness room 38% 42% 33% 39%
non-luxury buyers
Indoor pool 32% 34% 26% 35%
P
Spa/jacuzzi/Hot tub 31% 32% 30% 32% than non-luxury buyers
Tranquility garden 27% 37% 16% 27%
Steam shower 25% 26% 24% 24%
Massage room 22% 26% 15% 24%
Sauna 20% 18% 15% 28%
Yoga or Pilates studio 19% 23% 15% 17%
Meditation room 17% 19% 14% 19%
On-site chef/healthy-eating plan 17% 20% 14% 16%
Oxygen chamber pod 13% 12% 12% 17%
Cryotherapy booth 13% 13% 11% 15%

Top Security Features/Amenities Essential in Next Residence

HOME PACIFIC AMERICA MIDDLE
BUYERS EAST ercent is significantly
P
Monitored security system/alarm 50% 52% 53% 45% greater than
non-luxury buyers
Data and internet security 44% 49% 42% 40%
P
Smart door locks 41% 48% 37% 37% than non-luxury buyers
CCTV surveillance cameras paired with computers
to automatically respond to suspicious activity 39% 50% 26% 40%
Failsafe features for power, internet, security systems 36% 40% 32% 36%
Built-in safe/storage 32% 29% 29% 39%
On-site security detail/monitoring 32% 34% 33% 27%
Gate house/protected grounds 31% 30% 29% 34%

LUXURY HOME ASIA NORTH EUROPE/

BUYERS PACIFIC AMERICA MIDDLE EAST
Top Specialty Dedicated home office 35% 30% 43% 31%
Room/ Dedicated laundry room

Formal living room (separate space)
33%
32%
26%
41%
45%
29%
28%
26%
Living Spaces Playroom/family room 31% 27% 44% 21%
Essential in Quiet spaces for each family member 31% 44% 22% 24%
Next Residence Separate guest suite

Workshop or hobby area
27%
27%
28%
32%
24%
24%
32%
26%
ercent is significantly
P Dual master suite closets 26% 27% 28% 21%
greater than
Chefs kitchen 25% 27% 25% 23%
non-luxury buyers
Library or music room 25% 28% 22% 26%
P
than non-luxury buyers Dedicated home theater room 25% 26% 22% 26%
Game room 24% 25% 24% 22%
Courtyard 23% 24% 20% 26%
Media room 23% 23% 24% 22%
Wine cellar 19% 16% 23% 18%
On-property guest home 19% 19% 16% 21%
Rooms for live-in help 17% 18% 14% 19%

VERO BEACH, FLORIDA, USA | $3,225,000
CONCLUSIONS AND
RECOMMENDATIONS

Conclusions and Recommendations
Consumer Findings
FINDING WHAT IT MEANS HOW TO RESPOND
The most prevalent concern among luxury home buyers Entry level buyers will be most impacted by this concern Have a conversation with clients about how they feel
is the risk of declining purchase power. as they, typically, have lower asset levels. Some will about spending on a home. Listen with empathetic ears
hesitate to purchase in this climate while others will and listen to the words they say. You may find they are
move quickly to get in while they can. eager to move, and you may find they will be happier if
they wait a little longer.
Fear of missing out on the real estate boom is a concern Luxury buyers with children are particularly concerned Buyers are sensitive to runaway prices and lower
for families and a motivator for purchasing sooner about being able to afford the house that they want to purchasing power so value-for-the-money will play a
rather than later. raise their family in. When credit is available, and prices key role. Go beyond the property’s value to reinforce
are affordable, these buyers will want to act quickly. the benefits of living in the area (whether low taxes,
excellent services, or business prospects). Be prepared
with satisfying answers to these points.
Three quarters of buyers keep this in mind when looking Sustainability is a significant consideration in luxury real The most impressive feature of a home may not be its
for a residence. 70 percent of buyers seek energy estate. The trend is also substantial among non-luxury rolling greens or babbling brooks — home sustainability
efficient design, appliances, and durable, weather-proof buyers and affluents not-in-market. This suggests a should be prominently featured in the positioning of a
building materials. long-term shift in what consumers want at home. These property. Any property can benefit from this description,
are no longer nice-to-have features but differentiators not just a home for an eco-lover.
that add value to the property.
82 percent of luxury buyers report significant concerns De-stressing is a must. For luxury home buyers it means Some friendly Q&A about hobbies and pastimes can go a
over COVID-19, unquantified risks like worsening being able to enjoy downtime with hobbies like video long way in creating a mental image for how a client can use
economic inequality, and remote work contributing to games, crafts, gardening, and other self-soothing a space. These conversations also help forge connections
family stress. activities. and deeper understanding between client and agent.

Conclusions and Recommendations
Market Findings
FINDING WHAT IT MEANS HOW TO RESPOND
Global luxury residence sellers are expected to increase in Sellers expect a repeat of 2021 with rising prices and crowds Keep hype in check with clients and prospects — buyers and sellers
number by 32 percent over last year, while global buyers are at the bidding table. The reality is there will be equilibrium should look for reasonable valuations and price adjustments. Use
expected to decrease by 38 percent, bringing the two sides into between buyers and sellers, but psychologically buyers are still data and reason to make sound decisions together.
near parity (5.2 million sellers and 6.3 million buyers). geared for a bidding battle.
35 percent of luxury buyers are seeking an investment property Individual investors are taking a page from the professionals Investors will be buying with a homeowner’s frame of mind
to generate revenues and capital gains. 41 percent of investors and adding family homes to their portfolio. High-rise — not just a vacationer. Expect that they will be interested in
are seeking single-family homes this year, up from 29 percent penthouses and hotel/resort developments can expect to knowing which features and amenities are in highest demand
last year. see fewer interested buyers this year as the travel industry for families, particularly those related to sustainability.
continues to get back on its feet.
89 percent of luxury buyers believe action is needed to address The trend is beyond hard to ignore at this stage. The One potential future is “sustainability as a service” that creates a
environmental sustainability. 50 percent also believe those expectation is that new construction will require amenities that steady stream of business while providing up-to-date technology,
features and amenities are worth paying more for. The reason it include energy efficient design and integrating smart home techniques, and functionality to the home. Respond by being
is important is both the ethical or moral imperative but also the technology into the fundamental working of the property. open-minded to the changing wants and needs and look for ways
financial benefits of lower cost of use and tax incentives. Younger buyers also perceive these homes to be worthy of to surprise and delight in this arena. Modern and contemporary
status and prestige, further adding to the value they bring. art are favorites among buyers — perhaps a local artist creates
from recycled materials, and they might want to know it.
40 percent of luxury buyers would purchase a home without Luxury buyers have grown increasingly comfortable with online Invest in the technology and platforms that make your process
physically visiting it first, including 32 percent of primary home transactions and are warming up to online broker/agents. efficient and effective. Take advantage of networks and pre-built
buyers. The likelihood of working with an online agency has Traditional firms command the bulk of the business now, but systems to bring your experience into the digital world. Would it be
increased 37 percent year-on-year. systemic changes in how people live and communicate are reasonable to 3D print a model of flagship homes to give buyers a
pushing buyers (and sellers) into digital marketplaces. gods-eye-view of the property? Remember: the tech is important,
but buyers care more about prompt service, knowledgeable
people, excellent product, and the reputation of their providers.

HILTON HEAD, SOUTH CAROLINA, USA | $7,900,000
STATE
OF
LUXURY
REAL
ESTATE
SOLRE 2022
luxuryportfolio.com
CHICAGO | 161 N. Clark Street, Suite 1200 | Chicago, IL 60601 | USA | +1 312 424 0400
LONDON | 1 Northumberland Avenue | Trafalgar Square | London WC2N 5BW | UK | +44 20 7872 5525
NEW YORK | 590 Madison Avenue, 21st Floor | New York, NY 10022 | USA | +1 212 521 4390 ©2022 Luxury Portfolio International.®
SINGAPORE | 1 Raffles Place | #20-61 Tower 2 | Singapore 048616 | +65 6808 6984 All rights reserved. Unauthorized use of this members-only document is prohibited

State of Luxury Real Estate

Uploaded by

Document Informationclick to expand document information

Document Informationclick to expand document information

Copyright:

Available Formats

State of Luxury Real Estate

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

State of Luxury Real Estate

Uploaded by

Copyright:

Available Formats

KILAUEA, HAWAII, USA | $9,000,000

©2022 Luxury Portfolio International.®

Consumer Mindset in Luxury Buying 10

The Market for Luxury Real Estate 2022 19

©2022 Luxury Portfolio International.®

Buyer Trends in 2022 25

Luxury Features and Amenities Essential in the Next Residence 35

Conclusions and Recommendations 41

©2022 Luxury Portfolio International.®

©2022 Luxury Portfolio International.®

ESTATE start to take hold.

Mickey ALAM KHAN

©2022 Luxury Portfolio International.®

©2022 Luxury Portfolio International.®

©2022 Luxury Portfolio International.®

buyers in the next 3 years. Interviews or More

Affluent Population Estimate:

31.9 million households Asia Pacific 1,482 425

©2022 Luxury Portfolio International.®

Definitions Within This Report Regions Surveyed

*New in SOLRE 2022.

©2022 Luxury Portfolio International.®

©2022 Luxury Portfolio International.®

Luxury Buyers: Frame of Mind

Reasons in the Market for a New Residence | LUXURY HOME BUYERS

19% 35% 13% 13% 10% 10%

$917 $1,167 $1,167 $1,500 $1,833 $1,833

©2022 Luxury Portfolio International.®

#1 Confident in Their Personal Economy  uxury buyers are

74% 73% 74% 75% 77% 78%

©2022 Luxury Portfolio International.®

#2 Discretionary Spending Power Could be Tested Buyer Insight: The primary

©2022 Luxury Portfolio International.®

©2022 Luxury Portfolio International.®

Percent Select: Significant Concern in the Coming Year | LUXURY BUYERS

©2022 Luxury Portfolio International.®

#5 Anxiety Over Unquantified Risks Buyer Insight: Many affluent consumers

Percent Select: Significant Concern in the Coming Year | LUXURY BUYERS

©2022 Luxury Portfolio International.®

63% 81% 56% 83% 79% 90%

©2022 Luxury Portfolio International.®

Percent Select: Significant Concern in the Coming Year | LUXURY BUYERS

©2022 Luxury Portfolio International.®

THE MARKET FOR

©2022 Luxury Portfolio International.®

The Wider Affluent Residential Market:

g 2021 SURVEY g 2022 SURVEY

24% 32% 17% 9% 10% 49% 55% SURVEY

©2022 Luxury Portfolio International.®

2022 is Primed to be a Strong Year Among Affluent Buyers

g 2021 SURVEY g 2022 SURVEY

©2022 Luxury Portfolio International.®

g 2021 SURVEY g 2022 SURVEY g INCREASE IN VALUE g NO CHANGE

11% 28% 17% 10% 11% 7% 61% 55% 63% 71%

©2022 Luxury Portfolio International.®

31% 21% 35% 22%

45% 52% 46% 53%

#1 Confident in Their Personal Economy uxury buyers are

g 2021 SURVEY g 2022 SURVEY

g 2021 SURVEY g 2022 SURVEY g INCREASE IN VALUE g NO CHANGE

g 2021 SURVEY g 2022 SURVEY Would Buy a Residence Without