The Blog of AVENUE Residential

Where the super rich are buying homes…

Courtesy of CNN Money – By Steve Hargreaves

The United States is the top destination for those worth more than $30 million buying residential property valued at a million or more, according to a report from Wealth-X and Sotheby’s International Reality.

Not only does America have more rich people than any other country, its stable government and high standard of living make it an attractive choice. Also, great colleges.

“Many [wealthy people’s] children attend university in the United States,” the report said. “For these families, the investment value of owning a property in the country is made even more attractive by the access it provides to educational opportunities.”

New York is the leading city worldwide for wealthy residences, where the rich are attracted by the city’s cosmopolitan feel and position as a financial hub, the report said.

Roughly 40% of rich buyers in New York work in finance, according to the report. Most foreign wealthy buyers in the city come from the United Kingdom.

London is the second most popular city for wealthy real estate buyers, and finance is also the top profession. Most foreign buyers in London come from India.

Rounding out the top five are Hong Kong, where the real estate industry is the main driver of wealth; Los Angeles, fueled by entertainment and San Francisco, driven by tech wealth.

At least half of these wealthy buyers use a mortgage to purchase their property. The report noted that wealthy individuals tend to keep large amounts of cash on hand (roughly 25% of their net worth), primarily for use in businesses opportunities. Mortgages, especially in this low interest rate environment, keep more money available.

Females preferred high end real residential estate as an investment over males. Wealthy women held 16% of their net worth in real estate verses less than 10% for wealthy men. On average, 64% of a rich person’s net wealth is held in business interests.

While cities — with their proximity to businesses centers — tended to dominate the list, the report also noted several hot spots that were popular for lifestyle reasons. In the United States, the top locations for vacation homes for the wealthy were Southampton, NY; Aspen, CO; Naples, FL; Greenwich, CT and Palm Beach, FL.

Top 10 cities for wealthy residences
Rank City Most foreign buyers from Top industry
1 New York United Kingdom Finance
2 London India Finance
3 Hong Kong China Real estate
4 Los Angeles United Kingdom Entertainment
5 San Francisco U.K, India, Australia Tech
6 Washington, D.C. Domestic Non-profit
7 Singapore India, Indonesia, China Real estate
8 Dallas Domestic Oil
9 Mumbai Domestic Industrial
10 Paris China Fashion