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The luxury home market is booming in some areas, despite a global dip. Palm Beach, Miami, and New York are leading the charge with significant increases in sales of homes priced at $10 million or more. Palm Beach saw a remarkable 44% spike, followed by Miami with a 27% increase, and New York with a 16% rise. These cities are attracting wealthy buyers due to their transformation into luxurious playgrounds.
New York is the top destination for high-end properties, with 72 sales over $10 million, its highest total in two years. Miami came second with 55 big-ticket sales, while Palm Beach secured 36. Los Angeles also made it to the top ranks with 42 sales, despite a 29% hit due to the new "mansion tax" on properties worth more than $10 million.
The most impressive deals of the quarter include Palm Beach's private island, which was sold for a whopping $150 million to Australian infrastructure magnate Michael Dorrell. In June, a historic 3.2-acre estate in Palm Beach was sold for $148 million. In July, Manhattan joined the mega-sale club with the penthouse at the Aman New York changing hands for $135 million, purchased by the project's developer, Vlad Doronin.
Despite cooling demand in other top-tier markets, ultra-wealthy buyers are still willing to pay record prices for these exclusive properties. According to Liam Bailey, global head of research at Knight Frank, substantial wealth creation has supported the growth in the global super-prime sales market. The transformation of hotspots like Dubai, Palm Beach, and Miami has offset the slowing experienced by some more mature markets.
Globally, the picture is not as rosy as it is in these areas. Knight Frank's report shows that sales of $10 million-plus homes in the top 11 luxury markets dipped 4% over the past year to $8.5 billion. Dubai has emerged as the new favorite for high-priced real estate, with an impressive 85 sales in the second quarter alone. The city's friendly tax and regulatory policies have attracted the ultra-rich from around the world, transforming it from just 23 sales in 2019 to 436 over the past year.
On the other hand, London is struggling. Sales of $10 million-plus homes there have plunged by a staggering 47%, as the prospect of higher taxes has made wealthy buyers hesitant. Despite this, high-end property brokers have something to smile about: most cash-rich buyers aren't borrowing to buy, but falling interest rates worldwide could boost sales in the coming months. And if last week's record 29 contracts signed for $4 million-plus properties in Manhattan is any indication, the luxury market could be poised for a hot end to the year. According to Bailey, with rates moving lower, total transaction volumes are likely to increase into 2025.
