Luxury Real Estate in the News - Trends around the world

Luxury Property News

Smaller luxury real estate firms are being absorbed by larger rivals as the market goes through a major shakeup. SLT today reports that Janet McAfee Inc has taken over Edward L. Bakewell Inc, in St Louis. Both firms serve the luxury property segment in St. Louis and St. Louis county. This trend is continuing around the world as real estate agencies come to terms with the current financial situation. Richard Worth estate agents in Wokingham, England was rescued in another takeover, by Hampton’s international. In the same vein, Damac, a major luxury builder in Dubai are shedding staff as it becomes clear that Dubai is not immune to the downturn, with property wire reporting that more than 50% of real estate agents in Dubai completed no sales in the last month, and 24% made just one sale.

Luxury property developers, Toll brothers, after reporting another substantial drop in orders, have expanded their “rent to own,” program to include Hoboken, New Jersey. This model is also being taken up around the world by cash-rich developers as an alternative to cutting prices. Smaller developers are resorting to price cuts in an attempt to stimulate the market, with a luxury property developer in Slovakia dropping prices by 40% overnight. Another tack being taken to attempt to induce buyers to commit is by David Berger of Fifth Square partners. A price protection guarantee. If prices should fall in between signing and closing, the buyer is guaranteed the lowest price available to other buyers at other developements. A little more inventive that their last pre-election, guarantee - that if a buyer signed and Barack Obama did not win the election, they were guaranteed the right to back out of the sale. Although my current favorite is Kipton Davis, a Prudential Douglas Elliman broker - offering wine and whiskey on a condo tour of four TriBeCa buildings. “Alcohol brings everyone together,” said Ms. Davis.

Dr. Richarrd Ragatz, a real estate researcher, is predicting that luxury fractional ownership of vacation homes will be the first segment of the market to recover.

The Seattle Times reports that home sales in Washington State dropped by the largest decline since records began in 1994 - 10.4%, and believe that the luxury sector is most over-supplied, suggesting prices will stabilise for entry level homes well before the luxury market. The International Herald Tribune reports that the Hong Kong property market is plunging after five straight years of dramatic growth.

Clearly, this is a good time for prospective buyers with cash or financing in place, but it seems these are few and far between at the moment, with most still waiting to see how far things will fall before making a commitment..