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Where in the World Top Buyers Shop

October 25, 2013

The strongest home purchasers tend to look for property investments in tried-and-true markets that offer both low risk and some potential for price appreciation. Outside of such safe havens, shoppers tend to buy in or near their own areas. Foreign buyers are willing to pay top dollar for second homes abroad, but the location needs to be a safe bet, according to a coming report on foreign ownership.

Global Getaways

Foreign buyers are willing to pay top dollar for second homes abroad, but the location needs to be a safe bet, according to a report by global property consultancy Knight Frank. Getty Images/Flickr RF
About 47% of prime home buyers are drawn to locations they view as solid investments, according to a report by Knight Frank, a global property consultancy based in London. To buyers, locations such as London and New York are protected from economic and political risk, plus offer potential for property appreciation. High-end buyers seek out tried-and-true places because they are still reeling from the economic downturn five years ago, says James Price, head of international residential development at Knight Frank who worked on the report. "They want liquidity. They want the best places to invest and be secure," he says. "The reasons London and New York are very popular is they are two genuine safe havens." Buyers looking for trophy assets may be willing to try a more offbeat locale for lifestyle features, but that isn't a typical motivation, he adds.

The Global Hunt for Homes

Source: Knight Frank Research; Flag illustrations by Andrew Janik

Knight Frank's Global Development Insight report, set to be released Friday, looks at buyer requirements for prime, newly built residential properties. The report—based on Knight Frank search data, sales data and survey responses from 54 individuals world-wide—ranked the leading countries from which buyers originate, and the most common sales locations and prices. Latin American buyers are big players in Miami, but they aren't ranked in Knight Frank's list, says Mr. Price.
The strongest home purchasers tend to look for property investments in tried-and-true markets that offer both low risk and some potential for price appreciation. Outside of such safe havens, shoppers tend to buy in or near their own areas. Photo: Tips.
Outside of the safe havens, buyers tend to buy in their own regions, the report shows. Buyers in China are the most significant purchasers of prime new-build properties internationally, spurred by a strong yuan and slowing domestic economy, the report says. Although their interest extends to properties in New York and London, their primary interest remains regional, the report shows. In Russia, which ranked third on Knight Frank's list, buyers look abroad after exhausting local options. "They already have property portfolios in Russia—a city home, a country home—and then they're looking for another property abroad," says Elena Yurgeneva, director of residential at Knight Frank in Russia and the Commonwealth of Independent States. Write to Sanette Tanaka at sanette.tanaka@wsj.comSource: http://online.wsj.com/news/articles/SB10001424052702303680404579143750789705062
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