Throughout history, the accumulation of wealth has often gone hand in hand with the acquisition of land. Status and power in cultures as diverse as feudal Japan, medieval Europe and dynastic China were inextricably woven with the ownership and control of land. Later industrialisation saw the acquisition of land and the construction of grand houses. These were a hallmark of new wealth for those who wished to acquire the lavish trappings of the more established moneyed-classes.
In the current post-industrial era, there is a looser fit between land and power but real estate, especially an individual’s private residence or residencies, still remains a status symbol for many. A global real estate market has emerged among UHNWIs, many of whom are worldwide players in their hunt for a business base as well as investments in residences and second homes.
This means that a growing population of UHNWIs around the world are having a significant effect on real estate markets at a global level. It is important for those involved in the global real estate world of cross-border investment to understand this particular strand of investor behaviour.
Meanwhile, the corporate and institutional ownership and acquisition of real estate globally that once dominated property markets, suffered a setback in 2008 as credit markets shrank and the availability of debt funding for property deals diminished. The co-incidence of the rise of private wealth, particularly in the “new world” and diminished debt availability, especially in the “old world” has been a fortuitous and game-changing combination.