Sotheby’s International Realty recently released its Luxury Outlook for the year 2022.
The company says that 2021 proved to be a perfect storm for the high-end housing market as the starts-and-stops of the pandemic’s reopening fuelled even stronger demand for larger homes and inventory struggled to keep pace.
Its Luxury Outlook report takes an in-depth look at the global property market and what that means in terms of real estate trends. Second-home markets across the globe have been experiencing a high demand since mid-2020, with luxury buyers motivated to seek out properties in holiday destinations with easy access to beaches, mountains and other scenic spots.
According to data from the National Association of Realtors, holiday home sales in the US were up 57.2 per cent year-over-year for January-April 2021, compared with the 20 per cent year-over-year change in total existing home sales.
There have been similar increases in inquiries in Europe: foreign buyers, undeterred by COVID-19, are buying properties on the French Riviera sight unseen, with brokers reporting multimillion-dollar sales to investors who haven’t set foot in the homes. In Greece, inquiries from American second-home buyers were up by 60 per cent in spring 2021 year-over-year.
Malta Sotheby’s International Realty is seeing a surge in foreigners looking for a second home in Malta and many enquiries from not only US buyers, but also South African and British clients, looking for safe and sound investments as they explore the possibility of citizenship and permanent residency through the Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment and the Malta Permanent Residence Programme (MPRP); this is despite tight travel restrictions curtailing foreign investment. “We have also seen an increase in the local market with wealthy individuals who already own primary homes in Malta investing in secondary prime properties. There seems to be a strong ‘fear of missing out’ mindset; the sense of urgency has heightened with clients being more demanding and decisive with their decision-making process,” Michael J. Zammit, director and joint owner of Malta Sotheby’s International Realty, said.
The company notes that the way buyers have been utilising these new investments has also changed. With remote-work policies still in place at many companies, homeowners are staying longer in their holiday properties, using them more like primary homes, rather than visiting occasionally and renting them out for the rest of the year. It also remains an open question as to how new owners of second homes will use their investments going forward, once rates of COVID-19 transmission decrease, travel restrictions are loosened and more workplaces reopen.
But for many high-net-worth investors, the pandemic has encouraged lifestyle changes that may become permanent.
“Of course, it’s hard to predict what might shift, but the uptake in demand for luxury properties means that unlike before, when it was a buyers’ market, the tides have now changed in favour of the seller. There may eventually come a cool-down in demand but we believe buyers who have already purchased holiday homes are likely to hold onto them for some time,” Zammit concluded.
To see the full Sotheby’s International Realty’s Luxury Outlook Report for 2022 or to find out more, contact Malta Sotheby’s International Realty directly on +356 2010 8077, visit www.maltasothebysrealty.com or visit their office at the Portomaso Marina, Malta.
CAPTIONMichael J. Zammit, director and joint owner of Malta Sotheby’s International Realty