Cote d’Azure Attracts Ultra-Wealthy

Candy & Candy, Savills World Research and Deutsche Asset all agree that Southern France’s Cote d’Azure is the most favored destination of the world’s wealthiest property buyers. A …

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Candy & Candy, Savills World Research and Deutsche Asset all agree that Southern France’s Cote d’Azure is the most favored destination of the world’s wealthiest property buyers. A five-bedroom parcel averages $28.5 million in the glitzy port city that attracts the super rich from Russia, North America, the Middle East and other locales. Sardinia’s Costa Smerelda and Monaco squeaked into the top five, while less sunny resort towns like Aspen and Vail in the U.S. and St. Moritz, Gstaad and Verbier fell into the top 20. Sales of top-flight luxury properties have been fueled by a boom in new wealth, according to analysts. For more on this continue reading the following article from Property Wire.

The Côte d’Azur in the south of France has claimed the number one spot in a new list of the world’s most successful luxury residential property locations where wealthy buyers want to buy a place to spend their leisure time.

With the price of a typical five bedroom property in the Côte d’Azur now exceeding $28.5 million, this sought after region is the ultimate and most expensive for home transactions among the ultra wealthy, attracting buyers from across Europe, North America and most actively at present, from the Middle East and Russia.

It comes top in the Candy GPS report by Candy & Candy, Savills World Research and Deutsche Asset and Wealth Management and identifies the top 20 prime leisure locations where the global super wealthy are purchasing additional properties.

Over 60 international leisure hotspots were identified in the research and analyzed based on global reach, real estate values, exclusivity and luxury tourism.

Two further European locations, Sardinia’s Costa Smerelda and Monaco also feature in the top five. Costa Smeralda boasts a vast luxury property portfolio across its 35 mile coastline and in Monaco there is currently a five bedroom villa on the market for €58 million.

Several Caribbean locations feature in the top 20. The small and exclusive island of St Barts ranks third overall, where prices have been sustained by the scarcity of stock at the very top end of the market and the continuing influx of buyers from new sources.

The much larger island of Barbados came sixth in the world ranking, partly due to the high volume of British buyers now purchasing leisure properties. The new and emerging Caribbean resort of Canouan, part of St Vincent, also features in the top 20 following significant infrastructure investment and major upgrades to its airport, that have brought more of the global wealthy within its reach and with property prices now average $6 million for a five bedroom villa.

Away from the sun, the ski resorts of Aspen and Vail in the United States and Courchevel in France ranked highly. Switzerland’s premier resorts of St Moritz, Gstaad and Verbier also featured in the top 20, where prices are considerably higher than Courchevel, reflecting the profile of their buyers and the relatively strong Swiss franc.

Historically the Swiss Alps market has been dominated by British and other Northern European buyers, but the last few years have seen increasing investment from Asian buyers. Asking prices for chalets in these exclusive ski resorts are more than $1,200 per square foot.

With its beachside homes, Sylt, the northernmost island in Germany, has long been associated with the German jet set. In Africa, the Cape wine regions are emerging as a luxury second home destination, while the Seychelles are seeing increasing second home buying activity.

Russian wealth is a key driver for many of the luxury locations. The report says that buyers from Russia are primarily acquiring properties in the Mediterranean, the South of France, Italy and increasingly in emerging destinations in the Eastern Mediterranean such as Montenegro. They are also particularly active in the United States and the Caribbean.

Middle Eastern buyers are also becoming more active in the global additional home market and are already the dominant buyer group in Dubai and Abu Dhabi. They are also buying in key luxury Mediterranean resorts and have been high profile investors in Marbella and the Costa Smeralda.

In Asia luxury home buying is concentrated in urban centers and in just a handful of leisure locations such as the Thai resorts of Phuket and Koh Samui, Bali in Indonesia, and Niseko in north Japan, which is popular for skiing.
Much of the ‘additional home’ buying activity in the region comes from Europeans, Americans and Australians working or doing business in Asia. Hainan Island is emerging as a high end destination for China’s wealthy buyers.

Meanwhile, recent Chinese purchases of Bordeaux vineyards suggest a potential new wave of lifestyle purchases by this buying group.

‘The growth of Ultra High Net Worth Individuals has fueled demand for prime secondary residences in exclusive leisure enclaves around the world,’ said Nick Candy, chief executive officer of Candy & Candy.

‘In the same way that we have seen exponential real estate growth in global cities over recent years, we expect to see the same level of growth and property values replicated in the top luxury leisure enclaves where the world’s super rich are choosing to purchase additional homes,’ he added.

According to Yolande Barnes, director of Savills World Research, who conducted the analysis, the motives for buying in any one of the exclusive enclaves listed in the research are as many and varied as the people that inhabit them.
‘UHNWIs operate on a truly global basis and their choice of location for additional homes is a footloose one based on their passions, interests, values and perceptions of different places,’ she explained.

The report also outlines the financial complexities of UHNWI leisure property purchases in today’s economic climate, with cultural differences, legal and tax systems, and financing all complex factors in the process.

‘Location, square footage and finish are the obvious driver’s of a property’s value but at the luxury end of the market, there are other factors to consider. Buyers need to have a strong understanding of the legal and tax considerations to ensure they are actually getting what they are paying for. These considerations can vary significantly depending on a country’s regulatory, tax and legal landscape,’ said Balaji Prassana, head of lending and deposits for Deutsche Asset & Wealth Management.

‘It is also important to consider macro-economic factors when buying a leisure property in the luxury sector, especially when some destinations across Europe are going through periods of economic upheaval, with not insignificant consequences for UHNWIs,’ Prassana.

Barnes pointed out that ultimately, it is the combination of global wealth creation and fashion that will determine the next playgrounds of the rich and famous.

‘It will be interesting to see whether Asian buyers start to adopt the European and North American preferences for sun, sport and skiing or whether they will continue to cling to more urban centers for rest and recreation. We may even see new forms of luxury enclave emerge from Asia in the future,’ she added.

This article was republished with permission from Property Wire.

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