Talk of the Town - Real Estate News from the Hamptons and North Fork

April 21, 2015

HOME: THE ULTIMATE EXPERIENTIAL PURCHASE

Affluent individuals worldwide are increasingly seeking to diversify and acquire assets of lasting intrinsic value such as fine art and luxury real estate. Speculation continues as to whether the global housing markets will continue to rebound in the coming years. In “A New Housing Boom? Don’t Count On It”, Robert Shiller forecasts that for the next half decade, housing prices, in the non-luxury sector at least, across the entire US residential market will increase only on an “inflation-adjusted price growth of one or two percent a year,” because of “lingering uncertainties” in various world economics. Conversely, there is much written about the resurgence in the strength of luxury goods and services regardless of whether the global markets are recovering, and the rebound in sales of luxury goods in many categories has proven this point. The Boston Consulting Group’s “Luxe Redux” study projected that global sales of personal luxury goods would grow at about “seven percent annually from 2012 through 2014 (assuming no major new economic crises).” Except where there is government intervention, luxury residential real estate values will likely follow luxury goods and not the general housing market, and are therefore poised to increase in many key markets. This is particularly true as high-net-worth-individuals turn their prestige investments toward non-consumables and experiential luxury products that have lasting value. According to...

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