St. Bart’s is one of the top destinations for affluent second home buyers
According to the latest research from Luxury Portfolio International, the luxury marketing division for Leading Real Estate Companies of the World® affluent under-forty buyers are fueling the luxury second home resort market creating a bright spot for sellers. The recently released research report, “The Allure of the Second Home: Why Affluent Buyers are Displaying Confidence in Resort Markets,” holds some surprises worth noting.
The study is global with 40% of the report’s uber-wealthy respondents coming from the Asia-Pacific region. It seems that last summer’s mega film hit, Crazy Rich Asians rings true. Since this is an international report, resort market buyers are looking at world-class destinations like St. Bart’s, San Tropez, Cabo San Lucas, The Hamptons, Aspen, San Moritz, Bali, Mauritius, and similar five-star hot spots.
The baby boomers though still in the market who traditionally held the top spot as buyers in that luxury second home market are being replaced by those under-forty buyers. According to Luxury Portfolio’s research, that younger crowd accounts for almost half of interested buyers or at least half of those looking. Stephanie Anton, president of Luxury Portfolio International shares her insights into the research. “I was surprised that nearly 50% who were under forty had a high intent to purchase. That’s pretty dramatic.” Of that younger luxury affluent buyer, 71% have children under eighteen.
What these luxury buyers want differs greatly from their parent’s generation. Gone are the country club card rooms, small pro shops and jacket and tie required fine dining options. Today it’s all about wellness and supporting amenities including, “rooftop meditation spaces, yoga studios, high-grade air filtration in the home and soundproofing.” Anton weighs in, “wellness, community and family programming which is what these buyers are looking for. That’s what you are seeing in new luxury developments. Young buyers want to spend their downtime with their families creating community while combating technology which they are tied to constantly,” Of those study respondents, “96% take at least one aspect of wellness seriously as part of their daily routine.”
“The high-end, second home market is a net growing market; buyers are seeking acquisitions, not replacements,” according to the report. Of the affluent consumers here, 62% are looking to exclusively buy while 22% expect to both buy and sell.
Who are these buyers? Anton answers that “we’ve been hearing from our Members that in areas like Vail and Hawaii, traditional second home resort markets, younger buyers with families are coming with cash.” Consider all that cash is not coming from multi-million-dollar salaries and bonuses for those in hedge funds and private equity firms. “A number of these buyers are Millennials who are beginning to inherit substantial amounts of money from their parents. It’s a transfer of wealth,” Anton observes. What stands out here is that 73% of these buyers, “grew up in a home with wealth.”
Global resort first-class resort developers with gold-plated names like Montage, Ritz-Carlton, Four Seasons and One&Only are taking note of these young affluent consumers as they develop ultra-luxury branded residences.