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Super Luxury: Worldwide Real Estate Markets

Posted by Ozzie Jurock

on Thursday, 07 December 2017 11:44

Peter Dupuis (He was the first to stratify an office building into condos (The Electra – old Hydro Building - on Nelson and  Burrard - yes, a big while ago) is now the marketer of super prime luxury real estate having sold some 27,000 luxury condos (Trump buildings, Ritz Carleton, etc.). In a wide-ranging, fascinating presentation to my Real Estate Action Group he displayed some current square footage prices in some of the world’s luxury buildings that left the audience gasping. He also felt that Vancouver was ‘right in line’ with the cities of the world considering ‘the place to be’ for the wealthy.

His thoughts on why the wealthy own Super Prime Property:
•    City Brand
•    Safe Haven Investment
•    Trophy Purchase
•    Capital Growth
•    Services
•    Access to Amenities
•    Security
•    Quality & Lifestyle

Vancouver scores very high on all of those points. Further, under a prediction of ‘why Vancouver, why now’? He listed these reasons why Vancouver (all waterfront city) will see $3,500 a foot in a few years – easy!
•    World’s #1 Ranked City
•    World Top 5 Most Resilient City
•    World Leading Sustainable City
•    Unmatched Natural Beauty
•    Best Air Lift to/from Asia
•    Ethnically Diverse
•    ‘Second Generation’ Asian Buyers

He then showed this summary of top buildings in the world and their current square footage price:

The Peninsula (Shanghai)        $6,100
Paris                                      $7,600
One 57 (New York)                  $8,500
Opus (Hong Kong)                   $9,100
Mori Tower Roppongi (Tokyo)   $10,500
Tour Odeon (Monaco)             $11,000
One Hyde Park (London)         $18,600

THESE ARE US DOLLARS! PER FOOT!

Major Point 1: Dupuis’ has an interesting perspective: The wealthy do not compare sq. foot prices with what else is for sale in a given local market, but how they compare to other ‘super luxury cities’. Thus his prediction of much higher luxury real estate prices for Vancouver. His next launch? Nelson and Burrard. His company S&P also created and supports an organization called “World Housing” which builds small homes in the slums of the world (Philippines, Haiti, Bangladesh etc.) – worldhousing.org. Such a most worthwhile undertaking  - look it up!

…AND THE REST OF THE WORLD?

During the second quarter of 2017 house prices rose in 28 out of the 43 world's housing markets. That is according to a research piece by the Global Property Guide. Most of the Middle East, Latin America, New Zealand and some parts of Asia are experiencing either house price falls or a deceleration of house price rises. Europe, Hong Kong and Canada continue to experience strong price rises, however.

The five strongest housing markets in this fine global house price survey for the second quarter of 2017 were: Iceland (+21.28%), Hong Kong (+19.27%), Ireland (+13.52%), Canada (+13.08%), and Romania (+8.87%).

The biggest y-o-y house-price declines were in Puerto Rico (-9.59%), Russia (-7.58%), Qatar (-6.25%), Macedonia (-5.99%), and Egypt (-5.32%). The U.S. showed mixed results, with the Case-Shiller index showing strong momentum to the upside. Overall: Six of the ten strongest housing markets in the global survey are in Europe and house prices have risen in 18 of the 22 European housing markets. ( I asked you to consider London (up 49% in 3 years), Berlin etc. in 2011, 2012, 2013, 2014, 2015)

Hong Kong housing market is now accelerating again, despite the higher stamp duties for non-first time home buyers introduced in November 2016. Residential property prices surged by 19% during the year to Q2 2017, in sharp contrast with the y-o-y decline of 11% during the same period last year.

In China, house prices continue to rise. In Shanghai the price index of second-hand houses rose by 7%

USA: The pace of price-rises in the U.S. housing market remains steady up by 4%.

Canada's house prices are rising strongly, despite repeated market-cooling measures.

Major Point 2: To repeat our longstanding stance, we at JREI predicted surging real estate prices for years (based on the relentless printing/creation of money) – which we felt would eventually settle in much higher asset prices. And it has: A painting sold yesterday at action for 450 million! Baseball card at $184,000. This survey proves the surge is worldwide…with a few exceptions. It also will continue until the US FED ‘retirement’ of the 4.5 Trillion QE actually takes place and Europe follows. We all should hope/pray however that this retirement is done with aforethought, patience and over a longer period of time…or that relentless climb up could turn into a relentless fall.  For details of this excellent survey (27 pages) by Matthew Montagu-Pollock go to globalpropertyguide.com.


Ozzie Jurock is the publisher of Jurock's Real Estate Insider (jurock.com). You can each him at oz@jurock.com


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