Great news, guys—the rich are getting richer and New York is one of the safe havens where the global billionaires will be stashing their fortunes in the coming years. While this might make New Yorkers who don’t number among the financial elite fret over things like the city’s growing income gap, affordable housing and public education, the developers of luxury real estate developers are totally stoked.
These are good times to cater to the ultra high net worth individuals of the world, according to a recent study about the very bright futures of the filthy rich and the multiple trophy properties they’ll be amassing in coming years.
Always keeping an eye on the fates of the world’s ultra high net worthers, Candy & Candy, Savills and Deutsche Bank compiled the study on the UHNWI’s (surely, there must be a better acronym) proliferation and increasing wealth in the future. They found that by 2017, the UHNWI population is expected to have increased by 20 percent and their wealth by 30 percent. Basically, the richest of the rich will be following the same upward trajectory as these last few years. While the merely wealthy suffered in the recession, ultra high net worthers were more or less unaffected by the global financial turmoil, as evidenced by their recent appetite for trophy properties.
“A trophy ‘safe haven’ property in a global city is typically at the top of the shopping list for wealthy individuals,” wrote Nick Candy, CEO of ultra-prime London developer Candy & Candy. “Their continuing appetite for such investments is expected to exert even greater influence over global property markets in the next few years.”
Obviously, this is good news for the brother duo behind the painfully posh One Hyde Park, a project that launched in the early stages of the financial crisis, but nonetheless managed to fetch London price-per-square-foot records thanks to the UHNWI who bought in. Though few people know who the individuals actually are, as is the case with so many top luxury deals, the units were bought by shell companies registered in tax havens.
In any event, the coming years look likely to bring more cash to developers who provide luxurious condos/safe deposit boxes for the world’s financial elite. In 2012, the financial hubs of London, New York, Singapore and Hong Kong saw 300 sales over $15.4 million, which are expected to increase to 400 per year by 2017, according to the study.
With all these very, very rich people buying more trophy properties to store their vast fortunes in, the property values will also be going up, according to the study, especially in New York, which has the largest share of ultra high net worthers in North America, but comparatively low prices because of the housing collapse.
The only dark spot on the horizon for luxury developers are property taxes (New York, the study notes ominously, has an annual property tax—how dare it, right?). While this has not been known to actually have an impact on the super wealthy, their real estate handmaidens are a little panicky. “Although tax changes have failed to have a noticeable impact on the buying habits of UHNWIs, there are fears that manoeuvres by governments will put off investors down the line,” the study worries.
After all, despite hoarding a larger and larger share of the world’s capital, incredibly rich individuals seem increasingly disinclined to share the spoils. Although perhaps the greatest luxury of all is not bothering to spend all your time and energy hiding your excessive wealth from the tax man.