Inventory crunch expected to affect global luxury real estate

September 27, 2017

The global luxury real estate market is expected to increasingly favor sellers over the next few years, with three buyers for every two available homes, according to a new report from Luxury Portfolio International.

The upper end of the market should begin to feel more of the kind of inventory pressure that has affected lower segments for the past couple years. More affluent buyers are expected to seek out luxury homes over the next three years, with 25 percent of high-net-worth individuals intending to buy, compared to 17 percent planning to sell in the future. Today, 14 percent of luxury homeowners are looking to buy, while 12 percent want to sell.

This expanding housing crunch could drive a construction boom, the Global Luxury Real Estate Report for 2017 says.

Because of a stable and growing high-net-worth consumer base, the top 5-10 percent in markets around the world have enjoyed a few solid years of growth. The affluent see real estate as a good investment as well as a symbol of success, and they are looking to buy eco-friendly homes, with an emerging trend of seeking homes that are adapted for aging adults.

The report also found that high-end buyers tend increasingly to value discretion in real estate transactions, with 82 percent agreeing with the statement, “My privacy has never been more important.” Real estate agents would be wise to show extra care in protecting luxury clients’ privacy, according to the report, which LPI produced with market research company YouGov.

Along those lines, more high-net-worth sellers are working with top agents to privately market homes without ever listing them on a multiple listing service if possible. Agents are expected to make the homes’ availability known among their contacts before going public.

YouGov researchers surveyed the top 10 percent of consumers in 14 countries and conducted more than 5,500 online interviews. They also conducted in-depth secondary research using pubic data in compiling the report.

For a look at luxury real estate trends in Long & Foster | Christie’s Mid-Atlantic markets, visit the LuxInsight  reports at