The Surge in Sales of Ultra-Luxury Homes

The sales of ultra-luxury homes have witnessed a significant surge in New York, Miami, and Palm Beach, Florida, during the second quarter of the year. While the rest of the world experienced a decline in such sales, these locations saw an impressive increase in transactions. According to a report from real estate firm Knight Frank, the number of homes sold for $10 million or more in the second quarter skyrocketed by 44% in Palm Beach, 27% in Miami, and 16% in New York.

Leaders in Ultra-Luxury Home Sales

New York led the way in the United States with the highest number of $10 million-plus sales, reaching 72, its highest total in two years. Miami followed closely behind with 55 sales, while Los Angeles and Palm Beach recorded 42 and 36 sales, respectively. Interestingly, Los Angeles experienced a 29% decline in ultra-luxury home sales, mainly due to the implementation of the new “mansion tax,” which imposes a 5.5% charge on homes sold for over $10 million.

Several record-breaking deals were noted during the second quarter. Notably, a $150 million sale in Palm Beach for the only private island in the area, reportedly purchased by Australian infrastructure investor Michael Dorrell. Additionally, a historic 3.2-acre estate in Palm Beach was sold for $148 million, while the penthouse of the Aman New York was acquired for $135 million in July.

While demand in various luxury markets is showing signs of slowing down from the peak in 2021, ultra-wealthy buyers continue to pay astounding prices for rare trophy properties. This trend is largely attributed to the growth in financial markets, leading to substantial wealth creation that supports the global super-prime sales market. Markets like Dubai, Palm Beach, and Miami have experienced significant transformations that have offset the slowdown in more mature markets.

Globally, sales of $10 million-plus homes in the top 11 luxury markets tracked by Knight Frank witnessed a 4% decline compared to the previous year, amounting to $8.5 billion. Dubai emerged as the world leader in ultra-luxury real estate, with 85 sales in the second quarter. The city has experienced a remarkable rise, attracting ultra-rich individuals from various regions due to its favorable tax and regulatory environment. Dubai’s sales over $10 million have surged from 23 in 2019 to 436 in the past 12 months, albeit experiencing a slight dip in the most recent quarter.

London stood out with one of the most significant declines globally, with sales of $10 million-plus homes plunging by 47% from the previous year, driven by concerns over higher taxes on the wealthy in the U.K. Despite the fact that ultra-luxury buyers typically make cash transactions, the decline in interest rates worldwide is expected to support sales in the latter half of the year. As rates continue to decrease, there is optimism for an increase in total transaction volumes leading into 2025.

The surge in sales of ultra-luxury homes in select markets reflects the dynamic nature of the real estate industry, driven by evolving trends, investor preferences, and economic factors. Despite challenges faced by some regions, opportunities for growth and development persist, offering a glimpse into the ever-changing landscape of luxury real estate.