New York has surpassed London as the second-most luxurious major housing market in the world after Hong Kong as the effects of the UK’s vote to leave the EU chipped away at the price of top British real estate.
“In New York, luxury price increases and robust sales volumes, particularly at the low-end of the luxury market, bolstered the city’s index position” last year, Christie’s International Real Estate said in a report. “Uncertainty over the impact of the UK’s EU referendum and stamp duties increases have cooled London’s market, though the city still recorded strong top sales and average per square foot sales prices.”
Hong Kong, which saw two residential sales above $100m — including one at $360m — and the highest price per square foot of any city, held the top spot for the second year in a row.
The city rankings are based on seven factors collected by Christie’s, including record sales price, average price per square foot for homes that sold for more than $1m, the number of sales above $1m, the number of sales over $1m relative to total sales, the percentage of local and non-local buyers, and the percentage of secondary and additional homeowners.
Top 10 cities for luxury real estate, 2017
- Hong Kong
- New York
- San Francisco
- Los Angeles
Despite the bump up the rankings for New York, the luxury market in Manhattan took a hit in the first quarter.
According to a report by Miller Samuel real estate appraisers and Douglas Elliman real estate brokers, the average sales price for luxury apartments across Manhattan fell by more than 15 per cent in the first quarter compared with the same period the year earlier.
The average price per square foot for luxury apartments fell more than 20 per cent, while the number of closed sales fell more than 24 per cent in the first quarter, the Elliman report found. Inventory rose at more than twice the rate of the overall market in Manhattan.
Some of the decline was attributed to jitters over the effects of US President Donald Trump’s changes to the tax code, which eliminated some incentives for home ownership, and the glut of new-build luxury homes in the city.
The Trump tax changes may drive property owners to shift their primary residences from areas like Connecticut and California to low- or no-income tax states such as Florida or Texas, the Christie’s report found.
Still, one of the biggest slumps in luxury real estate has been seen in Miami, Florida, which fell out of the top 10 cities this year. The average days spent on the market for luxury homes in Miami rose 17 per cent to about 175 days.
Christie’s said the “hottest” market for new homes, based on the greatest rise in year-on-year increases in both luxury sales volumes and prices, was Victoria, British Columbia; followed by San Diego and Orange County, California; Washington DC; and Paris. The hottest markets for second homes were Santa Fe, New Mexico; Muskoka, Ontario; Sarasota, Florida; Sun Valley, Idaho; and the Bahamas.