The media has always been trying to cover the luxury market.
However, their covering is a bit biased. Millennials were not in the picture. Plus, the rich people’s buying stats were the only ones presented for luxury markets.
But the rich face many problems today. Those include low inventory and high competition for luxury houses.
Below, we have an analysis. We’ll look at how rich buyers find their property and shape the market.
We’ll also look at the two biggest demographic cohorts that drive the luxury market.
Here’s the Analysis
Baby boomers are the major force in the luxury property market. That’s natural, considering they’ve been in the workforce for much longer than the millennial generation.
As a result, baby boomers control the demand and supply of the market.
Some buy for lifestyle. But others buy for investment. Many boomers sell a large number of luxury houses while reinvesting. For example, a boomer could sell a house for 4 million$ and buy two houses for 2 million$. This is to fulfill ever-changing retirement needs.
Some boomers prefer to buy up over downsizing. This leads to greater restraints on the luxury housing inventory.
We think that the reasons are psychological. Many boomers refuse to live the same life their parents had.
Boomers have an active lifestyle and good health compared to the previous generations, but they also want a place with access to local facilities and culture.
That is, they’re putting in mind access and the flexibility for future care needs (post retirement, etc.).
Currently, there is a lack of demand in the accommodation they desire. This lack of suitable accommodation has a negative effect.
So many boomers are sticking with the less desirable homes they have. This means a reduced ability to downsize, and in-turn, this means less stock for the younger buyers.
Boomer Moving Habits
Boomers usually move from their suburb areas to more luxurious modern places. Those boomers look for more bedrooms and bathrooms to fit more visitors.
Their moving habits are quite social too. Even while downsizing boomers are looking to be a part of the activity.
Older rich buyers try to benefit from the sharing economy. They’ll usually offer millennials the opportunity to buy or rent out their luxury houses.
That’s often the case, where millennials are known to enjoy second-hand houses more than usual. Some of them rely on Airbnb. And while it does come with higher pricing, it’s a convenient system for both parties.
Millennial Buyer Demands
Millennials seek comfort and a modern entertainment lifestyle. Second home markets are attractive to that end.
Cannes city is the best example for luxury market buyers. It’s quite popular, mainly due to the celebrations it has almost year-round. Rich millennials spend 5 to 15 million dollars for modern properties there. Also, with a beautiful seaside view and big reception rooms, it’s a match to modern preferences.
Other areas preferred by millennials include LA California and Super Cannes.
Older nomad millennials are part of the luxury market, with telecommuting millennials seeking a newer lifestyle. They want a lifestyle that matches their special needs.
Some opt to give up suburban life for second-tier areas. Those include Lisbon, Austin and Asheville (which are still luxury areas).
Those areas come with a “hip” lifestyle. They also come with a level of affordable luxury, where business men and creative young minds can gather.
Young Luxury Exists
Young luxury is when parents fund purchases for adult children.
This could be partial or full funding. Some parents choose to make certain purchases while their kids are still at school.
The children could also be in their early learning years. Here, they will look for property close to services required by those kids.
The real estate luxury market is huge, and it matters to both boomers and millennial buyers.
It’s mainly for buyers who wants to level up their lifestyle.
People turn to luxury homes for many valid reasons. They include more flexibility, investment, upgrading to a more modern life or simply the joy of a better view.
No matter what the reason is, luxury homes are great for a variety of buyers all over the globe.