The state of luxury real estate in 2022

The global market for luxury real estate remains strong in 2022 after a record year of sales - and rocketing prices - in many locations during 2021. Supply, demand and pricing in this sector are all starting to normalize, so the next 12 months are expected to see more activity in South Africa's best known luxury suburbs, as well as other favourite destinations for affluent home buyers around the world.

That's the word from Rory O'Hagan, head of the Luxury Portfolio® division of Chas Everitt International, who says a lack of inventory was a significant price driver last year but that more luxury homeowners are now interested in selling (28% as opposed to 11% last year) and that this will loosen things up and create more movement in the market going forward.

"Indeed in South Africa specifically, we have already seen the number of sales in the luxury price categories rising since the rate of price increases began to moderate after June 2021, when it hit a high of 5,3% a year, according to property data company Lightstone. By February this year, it was down to 4,24% a year."

Sharing the findings of the most recent Luxury Portfolio International survey* of the most affluent consumers around the world, he says this research also shows that while luxury buyers generally remain confident of their household financial strength and ability to cope with economic upheavals, almost all are worried about their freedom to spend their wealth as they wish being curtailed - by increased taxes, slower economic growth, rising inequality, currency devaluations and slower stock market growth - and that "this is also increasing their appetite to buy the new properties they want sooner rather than later".

Meanwhile, the survey also reveals some interesting shifts in buyer preferences for luxury sellers to take note of:

**For example, while the top trend in luxury real estate since late 2020 has been finding a home with enough space for the family that works and studies at home full-time, the focus has now shifted to de-stressing that environment, especially in the event that Covid-19 or some other global event should once again require them to remain homebound.

"Consequently, there is rising demand for 'whole life' homes complete with their own entertainment and sports amenities such as home theatres, bowling alleys, putting greens, wine cellars, cocktail bars and private night clubs in addition to at-home spas, gymnasiums, hair salons and specialty rooms for media and gaming."

**In addition, says O'Hagan, sustainability has rapidly gained ground as a really important differentiator in the luxury property sector. "The research shows that a whopping 75% of luxury buyers are now choosing their next home with environmental sustainability in mind and that more than 50% are prepared to pay a premium for the features they want.

"These include Smart home automation and related technologies as well as energy-efficient designs and appliances, sustainably sourced building materials and sustainable power and water sources such as photovoltaic panels, rainwater tanks and boreholes."

**A more surprising research finding, he notes, was the strong and rising demand among luxury home buyers globally for investment properties, with 35% saying their next purchase would be for this purpose, compared to 28% last year. By comparison, only 19% said they would be buying to upgrade to a better home or area, with the remainder split between wanting a different location in terms of lifestyle (13%); buying to settle down or expand their family (13%); moving to a better location in terms of taxes, crime or business (10%) and buying as part of a new life stage (10%).

"What is more, more than 40% of these luxury investment buyers are now focusing on single-family homes rather than high-rise apartments, townhouses and resort residences. This is of course good news for home sellers in affluent South African suburbs and golf/ lifestyle estates, which are already favoured by mobile executives and corporates seeking high-end rental homes that offer the best of the SA weather and lifestyle as well as first-rate security and proximity to exclusive shopping malls, top schools and SA's most important business and financial centres."

O'Hagan says that thanks to technology, it has also become easier for luxury home sellers to showcase their properties to a worldwide audience of these potential buyers - especially if they are working with Chas Everitt International, which is part of the Luxury Portfolio® global marketing network spanning more than 70 countries, and also has the technologies available to provide buyers with rich and detailed online viewing experiences.

"With so many people becoming used to video calls and meetings and searching online for everything, we have also seen buyers becoming more willing to purchase a home without visiting it in person - although not generally via any automated process.

"It is important to remember that most affluent consumers equate luxury with relaxation, and in the home-buying context that translates to having a trusted advisor on hand to anticipate their needs and personally guide them through the whole process, especially if they are purchasing a property outside their own country. And that is exactly what our Chas Everitt Luxury Portfolio® agents are trained and equipped to do."

*The survey was conducted worldwide on behalf of Luxury Portfolio International® by the Affluent Consumer Research Company.

About Chas Everitt International

The group is the South African affiliate of the Leading Real Estate Companies of the World® network and its luxury property chapter Luxury Portfolio International® (LPI), which spans 70 countries and links more than 560 premium independent real estate companies. The 200 luxury brokerages that are also members of LPI have a global audience of three-million affluent investors, and annually market some 50 000 properties worth a total of more than US$55bn.

Issued by Chas Everitt International

For more information

Call Berry Everitt on

082-441-3601

Or visit www.chaseveritt.co.za