THE ADDRESS Magazine Summer 2014 - Page 317

since 2008 but prices have now stabilized, while Megève and Val d’Isère have been helped by limited supplies and there has been price growth during the rocky period. In the Caribbean, buyers are coming back and prices seem to have bottomed out. The perennial favourite islands are seeing the best returns and with little or no new supply during the downturn, new buyers are left searching and off-plan sales are growing. In South Africa, the Western Cape is much in demand, largely because the devalued local currency is making the area more affordable to Europeans and Americans. The Atlantic Seaboard is much sought because of its beaches and ocean views while in the Cape Winelands, Stellenbosch is popular and appeals to families for its good schools. Record set on London penthouse sale The world’s super-wealthy continue to drive up real estate prices in London. Concerns that locals are being frozen out of the city’s market are on the increase as wealthy Russians and Middle Easterners continue to seek out prized London addresses. Recently, One Hyde Park announced the sale of a 16,000-square-foot penthouse for £140 million (USD237 million). The only other cities commanding prices in the same league are Hong Kong, Monaco and New York. London’s prices are setting all-time records and while concern grows over an overheating of the market, foreign money continues to flow in. In this latest deal, the penthouse was believed to have been bought by someone from Eastern Europe. The previous record apartment price was set three years ago when Ukrainian billionaire Rinat Akhemtov paid £136 million (USD229 million) for two properties at the same One Hyde Park location, which he then converted into a single residence. Foreign buyers watch the London market warily as new public policy initiatives are introduced that impact upon their plans. On April 15, Britain increased the capital gains tax. Luxury real estate shows a strong correlation with the top end of fine art What do high-end real estate and world-class works of art have in common? According to Christie’s International Real Estate, the value of the utmost in both has risen by more than 20% in the past year. A report released by Christie's International Real Estate (CIRE) in April 2014, “Luxury Defined: An Insight into the Luxury Residential Property Market”, shows that luxury real estate has a far stronger correlation with the elite end of the fine art market than it does with the general housing market. They are both satisfying lifestyle choices and they both deliver handsome returns on investment. Christie’s says high net worth buyers from emerging countries are starting to appreciate what those in more established jurisdictions have known for a long time: It pays to buy the best, be it fine art or luxury homes. The best in fine art has enjoyed the kind of resurgence experienced in the high end of the real estate market. The wealthiest buyers are looking for uniqueness, craftsmanship and experiential luxury. Each market is driven by limited stock and high demand. Both deliver assets that are bound to appreciate. International homebuyers showed an interest in city-based investments especially, with seven in 10 High Net Worth Individuals (HNWIs) buying in cities. This trend was identified in PwC's and The Urban Land Institute's “Emerging Trends in Real Estate 2014” report which highlighted that 61% of millionaires live in urban areas and did so because they wanted a “walkable urban area”. 317