The World’s Ultra-Wealthy Own $3 Trillion in Luxury Properties That They Live In

A recent study by Wealth-X and Sotheby’s International Realty found that owner-occupied residential properties hold nearly US$3 trillion of the world’s private wealth, which is more than India’s GDP.

There are 211,275 ultra-high net worth (UHNW) people in the world, who are who have net assets worth at least $30 million dollars, and 79% of them have two or more homes.

New York City, London, and Hong Kong are some of the major centers for luxury residential real estate, but specialized locations like Lugano, the Hamptons outside of New York City, and rural areas around the world are becoming more and more well-liked.

According to the Wealth-X and Sotheby’s International Realty Global Luxury Residential Real Estate Report, there will be a significant impact on the luxury residential real estate market due to the ongoing shift in the wealth creation cycle from the West to the East and the growing significance of intergenerational wealth transfers, with a particular focus on new developments and a shift in investment grade cities.

The following are additional main conclusions from the first report:

Globally, the value of residential real estate assets owned by UHNW rose by 8% in 2014.

UHNW people own 2.7 owner-occupied homes on average.

More than 7% of UHNW people worldwide, up from 5% in 2013, derive their wealth from real estate as of 2014.

With an average holding of 16% of their net worth in real estate versus less than 10% for men, ultra-wealthy women place a higher value on real estate assets than their male counterparts do.

UHNW individuals with inherited wealth typically favor luxury residential real estate, holding 17% of their net worth in such assets compared to just under 9% for self-made UHNW individuals.

UHNW people whose net worth is between $30 million and $50 million usually keep their primary residences for more than 15 years and their secondary residences for more than 10 years.

On average, billionaires switch out one of their four homes every three years.

Secondary homes typically cost 45% more than primary homes, have twice as much square footage, and 10 acres of land.

Monaco has the highest percentage of UHNW homes owned by foreigners, at 83%.

Over 6% of UHNWs worldwide have moved their primary residence from where they were born to another country; these people frequently maintain a secondary residence in their native countries, with India leading the pack in this regard.

The Wealth-X and Sotheby’s International Realty Global Luxury Residential Real Estate Report 2015 examines global trends in the demand for luxury residential real estate among the UHNW population and identifies particular attitudes, behaviors, and geographic areas that are significant to this sector of the market and this group of wealthy people.