The UHNW Luxury Real Estate Report released by Wealth-X and the Sotheby’s International Realty has shown that more and more ultra-high net worth (UHNW) individuals are investing in luxury real estate in countries offering investment immigration programs.
The report indicates that UHNW investors prefer real estate for two primary reasons:
- Safe diversification of their portfolio, and
- The opportunity to gain citizenship or residency in developed nations.
The Report defines an ultra-high net worth individual as those owning assets worth US $30 million or more. UHNW investors intending to diversify their portfolios and to minimize risks opt for properties in cities like Sydney and Vancouver. Those seeking investment immigration opportunities prefer destinations like Malta, the Bahamas, and Sao Paulo.
Data collected and analyzed in the Report reveals that 12% of second homes purchased by UHNW individuals residing in the BRICS nations—considered as emerging markets— are situated in foreign destinations. The USA is a preferred destination for rich investors seeking attractive luxury real estate deals. Citizens from Canada, the UK, and China are the top three foreign UHNW real-estate investors in the country.
The Report confirms that most UHNW investors continue to view real estate as an attractive and reliable asset class. The UHNW Residential Real Estate index rose to 115.2 in the second quarter of 2015, which is the sixth-consecutive quarterly rise seen in the Index. According to the Index, there are more than 210,000 UHNW individuals all over the world holding around 10% of their net worth—worth almost $3 trillion—in real estate.
This Report clearly showcases the importance of attractive opportunities in real estate for UHNW investors. This asset class is preferred as it offers the dual benefits of portfolio protection and the option of obtaining a second passport on the basis of such property investments.
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