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Do the wealthy love a recession as luxury home sales increase?

Do the wealthy love a recession as luxury home sales increase?

Do the wealthy love a recession as luxury home sales increase?

By: Nick Marr -  Category: United States - Added: 2011-10-03

Despite the recent global financial crisis and concerns over the prospect of a ‘double dip’ recession, wealthy buyers are continuing to buy luxury homes, many paying cash for the privilege.

A new report from Christie’s International Real Estate has found that the sales of luxury overseas property actually increased by two thirds in 2011 compared with the same period last year as rich buyers snap up properties across the globe.

Sales of luxury overseas homes increase 67 per cent in 2011

Christie’s International Luxury Residential Report has found that property sales across the company’s affiliated agents were 67 per cent higher in the first eight months of 2011 compared with the same time period last year.

Nick Marr of “ We are promoting luxury real estate from apartments to private islands and one thing is for sure prices are getting lower.  We all know that for investors profits are made on the purchase and for luxury home buyers they are getting more than they bargained for.”

The report attributes this increase to the scarcity of luxury overseas property in desirable locations.  Destinations such as Paris – which has seen an 18 per cent rise in prices in 2011 – London, New York, Hong Kong and Beverley Hills are particularly popular.

Additionally, A Place In The Sun reports that ‘top performing real estate sales are in those countries with an abundance of natural resources and favorable fiscal policies such as Brazil, Switzerland and Canada.’

Christie’s also found that, according to 87 per cent of their affiliate network, rich buyers were snapping up these luxury homes for cash – unsurprising considering the continued problems with obtaining mortgage finance across the world’s banks.

Giles Hannah, the company’s director of sales for Europe, believes that even economic uncertainty cannot stop the super rich buying luxury homes: “Like a fine wine or an old master, an exceptional property is bought to be enjoyed and will always find a buyer.  Scarcity is driving the market forward, there is only a finite number of properties at this end of the market,” he said.

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