The world’s super-rich collectively spent $6.6 billion in a recent 12-month period on homes worth $25 million or more, according to new research by Knight Frank, the global real estate consultancy firm. The ultra-wealthy bought these residences in cities around the world, but Hong Kong was the most popular market.
In the year ending August 2018, there were 47 ultra-prime residential property sales in Hong Kong, worth a total of $2.5 billion, Knight Frank says. (“Ultra-prime” is the term given to markets with at least three transactions worth $25 million or more in each of the last three years.) New York was home to 39 such deals for a combined value of $1.5 billion, and London followed closely with 38 ultra-prime transactions, also worth $1.5 billion.
Hong Kong also leads the way in terms of the average value of ultra-prime transactions. In the 12-month period ending August 2018, the average ultra-prime sale there was worth about $53 million, versus $44 million for Singapore and Sydney, the cities that tied for second place.
According to Knight Frank’s report, investment in residential property in Hong Kong is attractive because of low property taxation and the absence of taxes on capital gains and inheritances.
In London, meanwhile, uncertainty over Brexit and rising stamp duty charges (that’s land and property taxes in the UK) have held down the number of ultra-prime sales in recent years. (In 2015, London had 72 such transactions, almost double the number of any other city that year.)
Still, Hong Kong, London, and New York remain the undisputed leaders in terms of where the super-rich choose to invest in super expensive property, Liam Bailey, Knight Frank’s head of research, told The Guardian. “The relentless creation of private wealth globally over the past decade has fueled the growth of ultra-prime residential markets,” Bailey said.
Around the world, people are indeed getting richer. Wealth-X, a research firm that focuses on the super-wealthy, published a report earlier this year that found the number of ultra-wealthy people—individuals worth $30 million or more—increased by 13% in 2017, with the fastest growth being in Asia.
According to Wealth-X’s report, Hong Kong dethroned New York last year as the city where the most ultra-wealthy people live. Knight Frank’s report pointed out that the largest buyers in Hong Kong’s ultra-prime property market are local.
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