Global Decline in $10 Million-Plus Home Sales Due to U.S. Election Uncertainty
Sales of homes priced over $10 million substantially dropped worldwide in Q3 2024, coinciding with U.S. election uncertainties. The Knight Frank report highlighted an 18% decline in sales volume across twelve global markets, particularly in the U.S., where significant decreases were noted in Palm Beach and Miami. Contrarily, London recorded an increase in ultra-luxury sales, while many American millionaires contemplated relocating abroad.
The ultra-luxury real estate market globally experienced a marked decline in activity during the third quarter of 2024, attributed to uncertainty surrounding the United States presidential election. Notably, the report from Knight Frank, a London-based real estate consultancy, indicates an overall reduction in super-prime residential sales, with 406 transactions of homes priced over $10 million occurring across twelve markets—a decrease of 18 percent in volume and 17 percent in value compared to the prior quarter.
Particularly within the United States, five major markets saw no growth in sales, with regions such as Palm Beach reporting their lowest figures since late 2022, documenting merely 16 sales in the super-prime category in Q3. Miami also recorded a significant reduction, posting a 60 percent decrease from the previous year with only 23 trophy sales.
In the Middle East, Dubai, a key luxury market, reported a 40 percent drop in sales for the same quarter compared to 2023. Conversely, London distinguished itself as the sole exception among the surveyed cities, where the number of $10 million-plus sales rose slightly from 47 in the second quarter to 51 in the third quarter, boosted by favorable economic policies from the new Labor government. Nonetheless, London’s figures remain below pre-pandemic averages, which were approximately $1.5 billion per quarter.
Moreover, the political and economic uncertainties in the United States have prompted many wealthy Americans to contemplate relocating overseas. A report by Arton Capital reveals that over half of U.S. millionaires are considering leaving the country following the elections, a sentiment echoed by 64 percent of younger affluent individuals, aged 18 to 29, who are pursuing investment opportunities abroad. Armand Arton of Arton Capital remarked, “The love affair between Americans and Europe has been going on for very long time. It comes with a price, and they are totally fine investing couple hundred thousand dollars or a half million into a property or a fund.”
The ultra-luxury real estate market encapsulates high-value residential properties, typically those priced at $10 million and above. The sector functions as a reflection of wider economic conditions, particularly influenced by geopolitical events, financial market performance, and investor sentiment. The impending U.S. presidential election has historically been a period of hesitation in the market, as potential buyers often delay significant investments while awaiting stability and clarity in the political landscape. This report highlights the direct correlation between the political climate in the U.S. and luxury real estate sales globally, showcasing the hesitation of affluent buyers to commit to purchases amid uncertainty.
In summary, the third quarter of 2024 witnessed a significant downturn in the ultra-luxury real estate sector, primarily influenced by the anxiety surrounding the U.S. electoral process. With many wealthy individuals pausing their home buying decisions, regions like Palm Beach and Miami faced steep declines in super-prime sales. Notably, while Dubai experienced a decline, London saw a slight uptick in activity. A rising trend of American millionaires considering relocation reflects broader anxieties about the political future and the consequent impact on overseas property investment.
Original Source: robbreport.com
