The latest report from real estate firm Knight Frank has revealed a significant surge in ultra-luxury home sales in some of the top markets in the United States. While many regions around the world saw a decline in sales of $10 million-plus homes, areas such as New York, Miami, and Palm Beach, Florida experienced a notable increase in the second quarter. According to the report, the number of homes that sold for $10 million or more rose by 44% in Palm Beach, 27% in Miami, and 16% in New York.
New York led the U.S. in $10 million-plus sales with a total of 72 transactions, marking its highest total in two years. Following New York, Miami came in second with 55 sales, Los Angeles with 42, and Palm Beach with 36. Interestingly, Los Angeles saw a 29% decline in ultra-luxury home sales, mainly attributed to the implementation of a new “mansion tax” that imposes a 5.5% charge on homes sold for over $10 million.
The second quarter of this year witnessed some remarkable high-end real estate transactions, including a $150 million purchase of Palm Beach’s only private island by Australian infrastructure investor Michael Dorrell. In addition, a historic 3.2-acre estate in Palm Beach was sold for $148 million, while the penthouse of the Aman New York changed hands for $135 million in July. Despite a slight slowdown in demand from the peak of 2021, ultra-wealthy buyers continue to pay record prices for rare trophy properties in these sought-after markets.
While some top luxury markets are experiencing a slowdown in sales, Knight Frank’s report indicates that substantial wealth creation has fueled the growth of the global super-prime sales market. Markets like Dubai, Palm Beach, and Miami have shown significant growth, offsetting the decline in more mature markets. Globally, sales of $10 million-plus homes in the 11 tracked luxury markets decreased by 4% year over year to $8.5 billion.
Dubai emerged as the leading city for ultra-luxury real estate, with 85 sales in the second quarter. The city has experienced a remarkable rise in high-end home sales, attracting affluent buyers from various parts of the world due to its favorable tax and regulatory environment. In contrast, London witnessed a sharp decline of 47% in $10 million-plus home sales, driven by concerns over higher taxes on the U.K. wealthy.
While ultra-luxury buyers typically make cash purchases, the report suggests that falling interest rates worldwide are expected to support sales in the second half of the year. With a favorable rate environment, total transaction volumes are projected to increase leading into 2025. Liam Bailey, global head of research at Knight Frank, remains optimistic about the real estate market’s trajectory, emphasizing the role of financial markets in propelling luxury sales to new heights.
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