A recent report conducted by Wealth-X and Sotheby’s International Realty, highlights a growing number of ultra-high net worth (UHNW) individuals are purchasing second homes overseas not just for investment purposes but also for any other potential opportunities that may be associated from owning these luxury residential properties.
The report entitled “The UHNW Luxury Real Estate Report: Homes As Opportunity Gateways” exposes two trends that are leading to the rise in the number of ultra wealthy individuals who are buying luxury homes abroad:
1) Overseas home-buying by wealthy individuals (defined as those with at least US$30 million in assets) from emerging nations seeking a safe investment diversification.
2) Buying a residence as part of a plan to gain citizenship or residency status in that country.
The report goes on to show evidence that residential real estate opportunities in both Sydney and Vancouver provide good opportunities for Ultra High Net Worth Individuals looking for safe investment diversification and Malta, the Bahamas and Sao Paulo, may appeal to wealthy buyers who are seeking citizenship or residency through property investment.
Globally, UHNW individuals collectively hold nearly $3 trillion in real estate assets, equal to 10% of their net worth.
The report confirms the important role real estate plays in a larger strategy to build a valuable asset portfolio.
Key report findings include:
- 12% of second homes purchased by UHNW individuals in emerging countries (those who reside in BRICS nations) are located outside their country of residence.
- Recent market fluctuations in emerging nations are leading a new generation of UHNW investors to consider investing in luxury residential real estate in Western markets.
- Chinese UHNW individuals make up the third largest share of foreign UHNW homeowners in the United States, behind only Canada and the United Kingdom.
- Twenty nations in Europe and the Americas now offer citizenship or residency programs to individuals willing to invest in domestic residential real estate.
- Many residential real estate markets with such programs – including Sao Paulo, Malta, and the Bahamas offer good long-term investment opportunities.