Knight Frank just released their 2014 Wealth Report which takes a look at the investment trends for ultra high net worth individuals (aka UHNWI’s defined as $30M+). It’s chock full of investment insights, including real estate. We provided some data/insight to the report (translation: a very tiny portion). Yesterday I mentioned their crazy new Asteroid Index yesterday.
I wrote a brief article for Country Life Magazine – a weekly glossy magazine based in the UK but distributed globally. Country Life is a beautiful publication chock full of luxury housing imagery. This edition (9/4/2013) had a US property focus to which I gave an brief overview of the US housing market over the past decade.
Note: I agreed to allow the editors “Briticise” my writing to match their audience but I had final approval of the content. So if you notice anything, ie Mortgage criteria” v. “Mortgage underwriting guidelines”, that’s why.
Once upon a time in the American market: Jonathan Miller retraces the history of the American property crash and examines
what is driving fresh price rises [Read the article]
Knight Frank’s Global House Price Index is published quarterly and tracks the performance of mainstream national housing markets around the world. They use Case Shiller results for the US market.
Europe at bottom:
With the Eurozone now in its second recession
in three years buyer confidence is at an all-time
low and it is no coincidence that all the bottom
12 rankings are occupied by European countries
The top performers:
But it’s not all bad news. Six markets recorded
double-digit annual price growth in the year to
September; Brazil, Hong Kong, Turkey, Russia,
Colombia and Austria.
Where we’re going
[click to open report]
I help provide their Manhattan and Miami insights and they liked the way I characterize the state of luxury housing as a “safe-haven” and the “new international currency.” Here are the top line observations in their Q4 12 Prime Global Forecast:
• In 2013, we expect prime residential prices across the 14 cities included in our
forecast to rise by 2.5% on average, with Moscow, Miami and Dubai being the
• A sharp slowdown in the global economy is the highest risk for the world’s
prime residential markets closely followed by government cooling measures.
• However, the current economic uncertainty is also considered a key driver of
demand in prime cities as HNWIs seek the shelter of ‘safe-haven’ investments.
• Supply, or the lack of it, will be a key determinant of price performance in cities
such as New York, Moscow and Miami in 2013.
• We envisage that government-imposed regulatory measures will keep a lid on
price growth in Asia in 2013 but the west-east shift in the economic balance of
power suggests more promising prospects in the medium term.
…real-estate consulting firm Knight Frank looked at 14 warm-weather vacation spots around the world. Using the average hours of sunlight per day and the average house price for a four-bedroom property in a prime real-estate location, Knight Frank arrived at the price for an hour of sunshine, averaged over a year…
Of course this is merely another way to slice and dice the high end housing market – just like the stock market – not scientific or useful but still fascinating – Florida looks like a pretty good deal.
No surprises here.Knight Frank’s Global Home Price Index comprehensive ranking of housing price changes in 55 countries showed Brazil and it’s economic boom at the top of the list. The Brazilians have jump started the Miami housing market nearly single handedly because housing prices at home remain so high that the US appears much cheaper.
A friend of mine shared this video with me, a speech by Pierre Poilievre, MP for Nepean-Carleton, on April 4, 2012, spoke on behalf of the Government on Budget 2012. He is incredibly eloquent, insisting that Canada is not going down the path that the US took. Yet here’s a sobering headline.
Earlier this year I was quoted in the Toronto Star as some sort of bubble veteran that broached the subject of a bubble and I was not surprised to hear the same rationale we heard in the US. Toronto new development was focused on small units to be purchased by investors to rent or flip although defenders rationalized that was how workers would move to the city to expand the economy. Deja vu.
Many believe that Canada is different because prices will only fall for the next few years unlike the US where it was a 6 year fall (2006-2012).
Well, that is still a correction or bubble for nearly the same reasons as the US: government policy, speculation and cheap credit.
My eureka moment
I have long thought that all the housing shows on HGTV ie “Property Brothers”, “Holmes on Homes” etc. were filmed in Canada instead of the US because production costs were cheaper – no! My theory: After the US market tanked in 2006, production was much easier in a housing market where prices were rising, marketing times were fast and credit was readily available. That’s why these shows have continued where “flip this house” in California left off….for now.
Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts. He holds the Counselors of Real Estate (CRE) and Certified Relocation Professional (CRP) designations. He is an Appraiser “A” Member of the Real Estate Board of New York and a member of Relocation Appraisers and Consultants, Inc. Learn More...
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Source: Knight Frank Knight Frank just released their 2014 Wealth Report which takes a look at the investment trends for ultra high net worth individuals (aka UHNWI’s defined as $30M+). It’s chock full of investment insights, including real estate. We provided some data/insight to the report (translation: a very tiny portion). Yesterday I mentioned their… Read More