Sales of ultra-luxury homes have seen a significant surge in New York, Miami, and Palm Beach, Florida, in the second quarter of this year, according to a report by real estate firm Knight Frank. While the rest of the world experienced a decline in these high-priced property sales, New York led the U.S. with 72 sales of homes priced at $10 million or more, its highest total in two years. Miami came in second with 55 sales, followed by Los Angeles with 42 and Palm Beach with 36. However, Los Angeles saw a 29% decline in these sales due to the new “mansion tax” that adds a 5.5% charge on homes sold for over $10 million.
The report highlights the biggest sale of the quarter, which was a $150 million deal for Palm Beach’s only private island, reportedly purchased by Australian infrastructure investor Michael Dorrell. This was followed by the sale of a historic 3.2-acre estate in Palm Beach for $148 million in June, and the sale of the penthouse of the Aman New York for $135 million in July.
According to Liam Bailey, the global head of research at Knight Frank, the growth in the global super-prime sales market has been supported by substantial wealth creation and the transformation of markets like Dubai, Palm Beach, and Miami. Knight Frank’s report also revealed that globally, sales of $10 million-plus homes fell 4% over last year to $8.5 billion in the 11 top luxury markets that they track.
Dubai, known for its friendly tax and regulatory regimes, leads the world in ultra-luxury real estate, with 85 sales in the second quarter. The city has experienced a significant rise, with 436 sales in the past 12 months, compared to only 23 sales over $10 million in 2019. However, sales in the most recent quarter fell slightly from last year and the first quarter.
On the other hand, London saw one of the largest declines in the world, with sales of $10 million-plus homes plunging 47% due to fears of higher taxes on the wealthy in the UK.
Despite the decline in sales in some luxury markets, ultra-wealthy buyers continue to pay record prices for rare trophy properties. Rising financial markets have played a significant role in boosting these prices. Additionally, falling interest rates throughout the world are expected to support sales in the second half of the year.
In conclusion, while luxury markets in many areas are experiencing a slowdown, New York, Miami, and Palm Beach are seeing a surge in ultra-luxury home sales. This trend is driven by rising financial markets and the appeal of rare trophy properties. Meanwhile, Dubai has emerged as the global leader in ultra-luxury real estate, attracting wealthy buyers from around the world with its favorable tax and regulatory regimes. However, London has seen a decline in sales due to concerns about higher taxes on the wealthy. With falling interest rates, the luxury real estate market is expected to pick up in the second half of the year.
