What Does Luxury Mean in Today’s Property Market?
How the Idea of Luxury in Real Estate is Evolving
Succeeding in today's luxury property market means understanding the evolving preferences of buyers with a big budget.
A tick list that would traditionally have consisted of a set criteria including features such as stables, plush green acres and boarding rooms for staff, is nowadays just as likely to prioritise features that enhance the emotional and physical wellbeing of its affluent buyers. As luxury London development company, Turnkey Developments, advises, ‘Understanding the psychology behind luxury homebuyers is crucial for creating properties that not only meet but exceed expectations.’
So what are luxury homebuyers looking for in their new homes? According to a 2023 report by Forbes Global Properties, ‘Luxury homes are expected to have amenities that cater to the changing needs and preferences of high net worth (HNW) and ultra-high net worth (UHNW) individuals.’ According to Forbes, key priorities include outdoor spaces, proximity to lifestyle amenities, multiple home offices, private pools, fitness areas, and large gourmet kitchens. ‘Another increasingly sought-after amenity is security,’ explains Forbes, with buyers actively seeking out homes in safer communities or with enhanced safety features.
Understanding the emotional drivers of luxury buyers is crucial. Here, we will explore the top five priorities for homebuilders of luxury homes, to understand what you need to include in your luxury property developments to ensure you’re meeting the expectations of this evolving pool of buyers.
But first, let’s think about…
The Changing Characteristics of Today’s Luxury Homebuyers
When thinking about the buying preferences of those seeking to purchase a luxury home, it’s worth taking into account how this demographic has changed over recent years. ‘Most of today’s millionaires weren’t born into their wealth, research shows. A study published by Wealth-X found that around 68 percent of those with a net worth of $30 million or more made it themselves,’ reveals Business News Daily. ‘Roughly 204 new billionaires were minted last year alone, according to Oxfam’s latest annual inequality report,’ revealed CNBC at the start of this year. However, Oxfam’s inequality report also found that ‘36% of billionaire wealth is now inherited.’ Though this 36% could also likely inherit country piles and city penthouses around the globe, the remaining 64% will arguably be looking to invest in the first mansions in their family’s history.
When planning the development of a luxury home or homes, it is important to understand what the dynamics of that particular home might look like. A study by Jill Yavorsky and Sarah Thebaud for Social Psychology found that, ‘Men are the sole breadwinners in over half of super rich heterosexual couples – defined as those in the top 1% of households – while the women are not employed.’ This is, according to the study, ‘Twice the rate of less affluent heterosexual couples.’ It is also worth noting that Wealth-X reported, ‘Women account for only 11% of the UHNW population.’ So, does this mean that property of this standing should appeal largely to its male purchaser? Arguably not, as these ‘women (who) are not employed’ will likely spend more time in the home than their corporate spouses. Also, to appeal largely to men would exclude the preferences of this not insignificant 11% of the UHNW individuals who are women. So, let’s look at the key priorities when planning, marketing and selling luxury homes.
1. Exclusivity
The luxury homebuying journey is often driven by a desire for exclusivity. ‘They want properties that set them apart, that offer unique features not found in standard homes,’ explains Turnkey Developments. This can include bespoke designs and features, rare and luxurious materials and amenities that could be found nowhere else. In some areas, this could also include gated communities, exclusive shared facilities and recreational spaces offered only to the owners of these particular homes. Taking the example of the eye-watering £26,700,000 price tag on a Marylebone Square 3 bed, 3 bath apartment, it is the exclusive aspect of the property seemingly used to merit this high price. Some phrasing in the property’s listing includes, ‘This is refined London living at its very best,’ ‘A glorious five-level, glass-canopied courtyard forms the architectural centrepiece of Marylebone Square,’ ‘Towering glass doors open out onto a generous, private veranda, creating a natural fluidity between the inside and outside living experience,’ and ‘The signature element of the architecture is the cast-metal balustrades, crafted by a local foundry.’ Every sentence in the property description screams exclusive, luxurious and sought-after, demonstrating its importance among its likely buyers.
2. The Story
The luxury property real estate market includes an additional selling element that sales agents of the middle or lower end properties normally need not concern themselves with. This element is called ‘The Story.’ When the purchaser of a home isn’t worried about the mortgage or the maintenance costs (or at least, not overly concerned with these factors) they have other priorities that they add to their lists. The Story works as another aspect of exclusivity. ‘The most important thing to understand is the space itself and the story behind it, because a luxury property buyer cares about the story as well as the numbers,’ writes Marco Del Zotto for Forbes. Buyers want a home with a story to tell their guests as they take them on a guided tour of their new home. A newly-built property might not have a story of kings and queens who have holidayed in its rooms, but the land and area will have a history of sorts and this is a great thing to mention when marketing the property. ‘The best storytelling captures the imagination of the buyer and connects the buyer to the land, views and overall feeling of life in the property, all before the buyer sets foot into the home,’ explains Del Zotto.
3. Security
As pointed out by The Pinnacle List, ‘In the world of luxury real estate, security and safety are top priorities for homeowners.’ Some buyers of high-end homes will have security personnel with them whenever they leave the house and their safety at home should be just as protected. The Marylebone Square apartment featured earlier offers a 24/7 concierge as well as full CCTV, for instance, while The Pinnacle List advise that, ‘Surveillance cameras, motion detectors, and smart lighting systems offer homeowners remote monitoring, providing peace of mind no matter where they are.’ They go on to explain, ‘Some properties even feature biometric security, such as fingerprint and facial recognition, which ensures only authorized individuals can access the property.’ The safety and security of the home is paramount for every buyer but in the case of HNW individuals, who feel their safety might be more at stake than the majority of the population, it should be highly promoted in the marketing and description of the luxury homes they are looking to purchase.
4. Technology
‘It’s no longer enough to have a gorgeous marble countertop or a sweeping view of the city – luxury buyers expect homes that can think for themselves,’ argues Silvero Realty Services. This ‘thinking’ comes in the form of Smart Home technology, that can tailor the ambient temperature, set the hot water and monitor the security for the property without any need for human intervention. Imagine a home that can plan your meals, match your mood and alter the lighting accordingly. This is the new world of high-end smart home technology, driving a new category of luxury living arguably into its most opulent era to date. When planning a luxury development, the latest technology isn’t a ‘nice to have’ – it’s a prerequisite. All the features installed can be described with their tangible living benefits, freeing up time of their residents and making the living experience simpler and hassle-free. After all, ‘At the heart of this revolution is convenience: why should you do something yourself when your home can do it for you?’ asks Silvero Realty Services.
5. Wellness
There has been a strong shift in focus towards our physical and emotional wellbeing in recent years, a feature of modern life that has traversed the consumer landscape and made its mark on all areas of daily life, including how we shop for our homes. At least, that is, if we can afford to make it a priority in our home search. In an article for Forbes titled ‘Here Is What Luxury Real Estate Buyers Want In Their Homes’ Dima Williams writes, ‘While traditional features such as spas and gyms may promote well-being, luxury home shoppers, Coldwell Banker’s report states, want more in the form of amenities that emphasise holistic health as well as environmental stewardship.’ Williams explains that ‘Today, there are different levels of eco-friendly certifications that buildings can obtain (and use as a marketing highlight), an advancement that is a part of the growing global trend of wellness real estate.’ And these certifications are worth obtaining for builders in this sector, with Williams pointing out that ‘Living in a “green” development often translates into 10%-20% premiums.’ So, while wellness facilities for the occupants are still of high importance, the property’s sustainable accreditations and features should be both optimised and marketed.
Finally, in the world of luxury real estate, one thing that appeals to buyers whatever their preferences in the property itself, is the experience they receive as a customer. We offer a range of products, both digitally and in traditional print to optimise the homebuying journey and enhance the personal touch. To find out how we can help you enhance the homebuying journey, please get in touch.