THE move away from obvious displays of wealth to pared-down simplicity in home-buying patterns – so-called wealth whispering – appears to have been short-lived.
Real estate players worldwide say the super rich have regained their appetite for trophy properties, with increasingly more buyers returning to opulent real estate hot spots.
British-based property group Knight Frank says it has over recent months seen a marked uptick in demand from high net worth investors looking to bag a trophy holiday home or investment property while prices are still below 2007/2008 peaks.
“Wealthy residents from a growing number of countries are investing more of their investment portfolios in luxury residential property across a widening range of locations,” says Liam Bailey, head of residential research at Knight Frank.
Bailey singles out St Moritz (Switzerland), Cap Ferrat (France), Paris, London, Monaco and Portugal’s Algarve as favoured playgrounds for those seeking top end lifestyle buys.
Interestingly, Cape Town is currently ranked alongside Abu Dhabi, Hong Kong, Sydney and London as the world’s most popular destinations for big ticket buyers motivated primarily by investment returns.
Bailey says other future high-growth luxury residential markets include Croatia, Montenegro, Vietnam, Brazil, Argentina and Morocco.
Investment bank Credit Suisse notes a similar increase in demand for residential bricks and mortar investments.
Its recently released Global Wealth Report notes real estate as a percentage of household wealth has increased markedly over the past 10 years, with investment portfolios generally equally split between financial assets and property.
Despite recent housing bubbles experienced by most countries, the report shows investors in many countries still have a heavy bias towards real estate.
In fact, real estate assets (primarily houses and land) currently represent at least 60% of total assets in the likes of France, Italy, the Czech Republic, Australia, China, India and Indonesia.
SA’s estate agents are spotting a similar return to residential bricks and mortar among the well-heeled.
Pam Golding Property group CE Andrew Golding says there’s a new generation of wealthy investors with a growing appetite for residential property as an asset class.
That applies particularly to top end trophy properties typically priced between R15m and R100m.
Golding says while iconic homes in idyllic locations have always held high appeal for the very affluent, there’s a growing trend among high net worth investors – particularly those with newly-acquired wealth – to buy into residential properties that offer an income-generating component.
Properties that would typically fall into that category include boutique wine, polo and wildlife estates, Lowveld lodges or game farms, upper-end guest houses and properties acquired for greenfield or redevelopment purposes.
Golding says over recent months there’s been a noticeable increase in buyer interest for trophy properties from other African countries and returning expatriates.
Wealthy buyers from southeast Asia, China and India are also starting to place SA on their radar screens as a preferred international real estate destination.
* This article was first published in Finweek.
* To read more Finweek articles, click here