Luxury Portfolio International® released its latest report, International Luxury Buyer Trends and Demand, which details the response from luxury buyers who plan to make an international purchase within the next three years. This report follows trends identified in LPI’s initial State of Luxury Real Estate 2021 report released back in January. “The past year has shown us that real estate is a timeless investment that can endure and even thrive in challenging economic conditions. At the same time, we have learned that our human spirit can adapt to new circumstances and overcome adversity,” said Mickey ALAM KAHN, President of Luxury Portfolio International®. Last week we shared insight into the report’s findings on the current international luxury market. Today, we are going to dive into the international luxury home buyer mindset and lifestyle.
Luxury Portfolio International® defines the term “International Luxury Home Buyers” as buyers who are likely to purchase in a different country than their current primary residence. This report share responses from 313 respondents in total, with 150 from APAC, 85 from North America, and 78 from Europe. These types of buyers also are likely to be somewhat younger than the average domestic home buyer with one in five being under the age of 30. In fact, the youngest group has the highest likelihood of buying internationally in comparison with all other ages. It is reported that 31% of 18 to 29-year-olds buying a luxury home are expecting to do so in another country. In reference to the marital status of international home buyers, findings revealed that they share many of the same family characteristics as domestic luxury buyers. About 82% of luxury home buyers are married and 65% of buyers have children under the age of 18 living with them in the home. In regards to the careers and success of luxury home buyers, 95% are currently employed, with 59% of buyers being either small business owners or executives in a business that they do not own. Another 14% of buyers make up professionals including doctors, lawyers, accountants, and other highly skilled industries. The minority of international luxury home buyers are independent contributors, managers, and supervisors.
Findings from the report include that the decision to purchase luxury real estate in another country combines three trends related to Freedom of Movement, Self-Reliance, and Embracing Spontaneity. When compared to domestic home buyers, the international luxury buyer places a greater emphasis on these three trends. Luxury Portfolio International® reports that a powerful motivator for international luxury home buying is Freedom of Movement with 22% of buyers reporting they have a second passport in their possession and another 58% interested in obtaining one. It was discovered that 76% of luxury buyers are interested in having dual citizenship and for a variety of reasons, including the ability to live and work freely in either country, owning property, and greater ease of travel. After this past year of being at home, we are learning that many buyers are eager to add some excitement to their daily lives. The luxury buyer mindset is keen on Embracing Spontaneity, such as changing their living situation and resuming activities that were placed on hold due to the pandemic. After developing a pent-up desire for experiences, 87% of luxury buyers are choosing to embrace spontaneity. The third trend seen amongst the international luxury buyer mindset is Self-Reliance. The report found that 40% of buyers share the belief that taking more control over their home security and overall physical environment is a top priority. About one in five buyers report having already taken the initiative to improve their personal security.
Aside from the three mindset trends identified in the International Luxury Buyer Trends and Demand report, findings included responses from international luxury home buyers’ perspectives on the luxury real estate market. It was discovered that 85% of international luxury home buyers are extremely confident in their household’s current financial strength. They are not only feeling confident in their financial future but also expect there to be considerable growth within the luxury market. Continuing the analysis of the international luxury buyer’s mindset, the report also evaluates their lifestyles, sharing that the most popular interests amongst current luxury homeowners include gourmet foods, luxury brands, sports, business/investing, family, culture, exclusive hobbies, and attending live music events. Of those mentioned above, the findings concluded that the three most prominent passions predicted amongst international luxury buyers include food, luxury brands, and athletics. Luxury brands play a vital role in the lives of international luxury home buyers. In fact, 62% refer to themselves as committed luxury buyers. In conclusion, the international luxury home buyer has a wide variety of interests, and they all focus on one outcome – living the best life that they possibly can. It is reported that international luxury home buyers tend to use all luxury categories more often than their domestic counterparts, including real estate and home furnishing categories. Across the board, the three primary categories that consumers tend to share amongst each other are personal care, financial wellbeing, and entertainment. The category of personal care includes apparel, fragrances, and jewelry, while financial wellbeing involves real estate and financial services. Lastly, the category of entertainment involves travel, food, and beverage.
All international luxury home buyers approach the market with varying needs. Investment properties and vacation residences are among the most popular reasons for purchasing a home. Most of these buyers are most interested in a single-family residence that is a relatively new build. When it comes to where international luxury home buyers want to live, the report states that they have diverse interests when it comes to the location of their ideal home. The properties boasting ocean, city, resort community, or lake/river view locations are highly sought-after. Interest in proximity to city or town neighborhoods is substantially lower for the international luxury home buyer. Instead, nature or resort-type settings are more attractive.
Are you a luxury home buyer interested in international luxury real estate? We are eager to help you choose your next luxury home destination. Connect with Seven Gables Real Estate to speak with an advisor today!