Turning Uncertainty Into Opportunity For Luxury Property Investment

We’re in a climate of great political volatility: Britain is watching the clock tick down on Brexit, Italy’s government is at loggerheads with Brussels and America and China’s relations are at a long-term low. And yet as many as a third of ultra-high net worth individuals are planning to invest in overseas property. So, is there opportunity in this uncertainty?

Uncertainty as a catalyst

Earlier this month, the pound fell to its lowest level against the euro for ten years. In Italy, a no-confidence motion could bring right-wing League party to sole power, while the US has postponed yet again its trade talks with China. It might seem like the sort of environment which would deter luxury property investment, but it is in fact the opposite. Faced with uncertainty the world over, high and ultra-high net worth investors are in fact being propelled by this volatility to seek certainty and stability.

And for many, that means bricks and mortar: it’s an investment that they can actively manage with relative ease. It’s also a relatively easy way to enter a new national market and further diversify their portfolio. We already see this trend in a more mature stage in markets which have already undergone significant economic and political volatility. 75% of ultra-high net worth individuals from the Middle East and 65% from Latin America own a second home abroad. Private investment in property has grown from around $70 billion in 2010 to $299 billion.

Why specifically luxury property investment?

So why is luxury property investment winning over other forms? For many, it’s the confidence of having an asset that has an intrinsic value, but also the potential to generate a high income year-round.

As an added bonus, that income generation can be as actively or passively managed as you want. You can choose how to do your marketing, whom to target, set price levels yourself. And for the hurdles of owning an investment overseas – how you keep your cashflow stable when its going between volatile currencies, or making sure the purchase is entirely in keeping with local laws – there are a plethora of experts on hand to help. At The Luxury Property Show, our exhibitors have decades’ experience of dealing with high-end, cross-border clients, helping them make the most of their investment. With specialist guidance, purchasing overseas can be as simple as at home.

Where are the key hotspots?

Europe is still top of many buyers’ lists. Investors from the Middle East, for instance, are looking to put $5.7 billion in property in Europe, according to Knight Frank Middle East Wealth Intelligence. Some of the most popular areas include traditional favourites like London – home to the highest concentration of high net worth individuals in the world – and new areas like the Costa del Sol’s ‘Golden Mile’, around Marbella and Estepona. These kinds of areas represent a strong investment, with prices climbing continuously since 2013, but not yet having reached pre-crisis levels. In other words, by getting in now, investors enter a market with strong potential, but that also has the advantage of offering higher returns due to lower entrance costs.

The Luxury Property Show is the only event of its kind in Europe, connecting high and ultra-high net worth investors with specialists in high-end property from market hotspots around the world. Enquire at theluxurypropertyshow.com for your tickets for the next event at Olympia London, 31^st October-1^st November 2019.