What Drives the Ultrarich to Purchase Abroad?

More ultrawealthy people in emerging nations are turning to luxury real estate as a way to diversify their assets or get residency in another country, a new report says. In a report released Wednesday, Wealth-X and Sotheby's International Realty say cities such as Sydney and Vancouver are becoming alternatives to London and New York since they also offer growth potential and a luxury lifestyle. In addition, Wealth-X and Sotheby's point to Malta, the Bahamas and São Paulo, whose governments are among 20 in Europe and the Americas that offer residency or citizenship in exchange for investment in residential real estate. The programs demand investments of as little as $200,000, says the report.

The UHNW, defined as those with at least $30 million in assets, are confident in luxury homes as an investment. The UHNW Residential Real Estate index, tracked by Wealth-X, rose in the second quarter for the sixth consecutive three-month period to a new high of 115.2, up 8.3% from a year ago. According to the report, 12% of second homes purchased by the ultrarich from BRICS nations (Brazil, Russia, India, China and South Africa) are already located outside their country of residence. These buyers are drawn to good investments and a chance to avoid economic forces hurting their domestic real-estate markets. That's the case of Chinese UHNW individuals, for example. Chinese citizens are pursuing luxury real estate in the West as a way to move their portfolios away from their home stock market, which has suffered a sharp fall in the past month. This year, China has already added 17 new UHNW individuals, the report says. Globally, there's a total of 211,275, who collectively hold nearly $3 trillion in real estate assets, which represents 10% of their net worth. View the Malta listing on Mansion GlobalView the Vancouver listing on Mansion Global Follow Mansion Global on Facebook, Twitter and Instagram Write to us at info@mansionglobal.com