Mapped: the cities where HNWIs will buy, hold and sell real estate

We asked wealth advisors to identify the cities in which their clients intend to buy, hold and sell real estate in the coming years. The aggregated results are shown on the map. The locations shown are those where buy and hold outweighs intentions to sell.

HNWI real estate purchasing intentions in cities

  • Net buy
  • Net hold

Source: Savills World Research/Wealth Briefing

Gateway world cities remain buys, despite very strong recent performance and plateauing prices in some. Important global centres of business such as London and Dubai lead the pack, and reflect the trend for UHNWIs and HNWIs to invest in cities in which they are active in business, visit often, or simply know.

The results of our survey also reveal a broadening of purchasing intentions to other centres. Madrid, Manchester, Barcelona and Chicago are all emerging as net buys. This reflects a global trend in a crowded investors market towards higher yielding secondary property, second-tier cities and alternative assets. European cities exhibiting this trend include Amsterdam, Oslo, Brussels and Berlin.

In Asia, Tokyo looks set to see more UHNWI and HNWI investment as market recovery gathers pace. Singapore is a buy, along with neighbouring Johor Bahru, a nod toward the strategic benefits of the neighbouring Malaysian city. 

Cities in emerging economies also feature on shopping lists for the next five years. Manila is a pick in the Philippines, Vientiane as Laos’ economic centre, and Phnom Penh, Cambodia’s fast-growing capital.

In Latin America, Mexico City is a hold among UHNWIs and HNWIs, while smaller Querétaro, a safe, business-friendly city with an historic centre (designated a UNESCO World Heritage Site), is a buy.  In Argentina, Mendoza, the largest wine- producing centre in Latin America and gateway to the Andes, stands out as a city of choice in the region.

In the US, UHNWI and HNWI investors are set to concentrate in certain pockets: the Pacific Northwest, California, Texas, parts of the southwest, and northeast, along with Toronto in Canada. Cities in these regions are driven by the knowledge economy, fast-growing local populations and in many cases, a burgeoning tech industry.

Net holds (but not new buys) include Beijing, Shanghai, Hong Kong and reflect the fact that these are already fully-invested cities as well as uncertainty around China’s growth prospects. In the US, Prospects for Los Angeles, New York, Washington DC and Miami remain positive, but as economic recovery spreads across the country, there are numerous other buying opportunities, especially in small tech-friendly regenerated cities.

African centres, including Nairobi and Cape Town, are net holds. While there has been plenty of foreign investment into income-producing assets on the continent (such as land and mining), African cities have yet to experience the same levels of inward investment seen into other regions. Africa is likely to see more acquisition activity beyond the five-year horizon of our survey.

Further information

Visit Savills World Research.

 

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Paul Tostevin

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