Source: Bloomberg BusinessThe Odeon, Monaco Penthouse: most expensive penthouse in the world
Sales are likely to increase this year with more newly built properties and off-market homes trading for at least $100 million, Conn said. Demand is growing among affluent Americans and Europeans; billionaires from unstable economies, such as Russia and Middle Eastern countries; and buyers from mainland China, who were barred from investing overseas before 2012 and since have snapped up houses in cities including Hong Kong, Los Angeles, New York and London, he said.
The penthouse and pool area of the Tour Odeon residential apartment block. At least 18 residences have asking prices of $100 million or more, led by the $400 million Monaco penthouse. Source: Realis/SCI Odeon via Bloomberg
“People want trophy homes,” Eyal Ofer, a Monaco-based shipping and real estate magnate, said in interview earlier this week at the Milken Institute Global Conference in Beverly Hills, California. “They’re a scarce commodity. And they’re better than gold because you can boast about it.”
Last year’s sales of homes for at least $100 million were led by an East Hampton, New York, estate purchased for $147 million by Barry Rosenstein, managing partner at hedge fund Jana Partners. The other top sales were a $146 million villa in Saint-Jean-Cap-Ferrat, France; a $120 million estate in Greenwich, Connecticut; a $104 million Hong Kong residence; and a $100.5 million duplex penthouse in New York’s One57 condominium tower, according to Christie’s.
Not all the properties went for close to the asking price. The Greenwich estate that sold for $120 million was originally listed for $190 million.
The fact that asking and sales prices for ultra-luxury properties are reaching new heights isn’t a sign of problems in the broader market and shouldn’t raise concerns that last decade’s housing bubble will be repeated, Conn said.
“I think of this market as fundamentally different from the rest of the market,” Conn said in an interview Thursday on Bloomberg Television’s “Market Makers.” “In order to buy one of these properties, you have to be in the billionaires club.”
Just one home sale exceeded the $100 million mark in 2013, following four such transactions in 2012 and three in 2011, Christie’s reported.
Residences currently on the market with asking prices at that level include a $400 million Monaco penthouse, a $365 million London manor and a $195 million estate in Beverly Hills, California, according to Christie’s. France’s Cote d’Azur, a getaway for jet-setters, has homes with asking prices of $425 million and $215 million.
The report analyzed home sales in 10 cities known for prime property and 70 additional markets, including weekend getaways, vacation resorts and suburban locations. The 10 cities are Dubai, Hong Kong, London, Los Angeles, Miami, New York, Paris, San Francisco, Sydney and Toronto.
The average starting price for a luxury home was $2 million in the areas Christie’s studied. It defines a luxury home as having a combination of location, such as a prominent street address, and amenities such as privacy, urban conveniences or collectible architectural quality.
London luxury homes averaged $4,119 a square foot, the most expensive of the top 10 cities. Beverly Hills and neighboring areas of Los Angeles had the highest luxury entry-price point, at $8 million. Toronto had the fastest sales pace, with prime properties finding a buyer an average of 31 days after listing. Dubai had the highest share of international and non-local buyers, at 75 percent.