Sales of ultra-luxury homes have seen a significant surge in New York, Miami, and Palm Beach, Florida, in the second quarter of the year. According to a report from real estate firm Knight Frank, the number of homes that sold for $10 million or more in these markets jumped 44% in Palm Beach, 27% in Miami, and 16% in New York. New York led the U.S. in $10 million-plus sales, with 72 transactions, its highest total in two years. Miami followed with 55 sales, Los Angeles with 42, and Palm Beach with 36. However, Los Angeles saw a 29% decline in $10 million-plus sales, mainly due to the new “mansion tax” that adds a 5.5% charge on homes sold for over $10 million.
The biggest sale of the quarter was a $150 million deal in May for Palm Beach’s only private island, reportedly purchased by Australian infrastructure investor Michael Dorrell. In June, a historic 3.2-acre estate in Palm Beach sold for $148 million, while in Manhattan, the penthouse of the Aman New York was sold for $135 million in July. Despite slowing demand in many luxury markets from the 2021 peak, ultra-wealthy buyers are still willing to pay record prices for rare trophy properties, driven by rising financial markets.
Globally, sales of $10 million-plus homes in the top luxury markets tracked by Knight Frank fell by 4% compared to the previous year, totaling $8.5 billion. Dubai stands out as the leading city in ultra-luxury real estate, with 85 sales in the second quarter alone. The city has experienced a significant rise, attracting ultra-rich buyers from Russia, China, Europe, and other regions due to its favorable tax and regulatory regimes. In the past 12 months, Dubai has seen 436 sales, a sharp increase from 2019 when there were only 23 sales over $10 million. However, sales in the most recent quarter slightly declined from the previous year and the first quarter.
London witnessed one of the largest declines in ultra-luxury home sales, with a 47% drop from the previous year. This decline was attributed to fears of higher taxes on the U.K. wealthy, according to Knight Frank. While ultra-luxury buyers typically pay cash for their properties, falling interest rates worldwide are expected to support sales in the second half of the year. The report suggests that with lower rates, total transaction volumes are likely to increase into 2025, indicating a positive outlook for the ultra-luxury real estate market.
The surge in ultra-luxury home sales in top markets like New York, Miami, Palm Beach, and Dubai highlights the resilience and appeal of high-end properties to discerning buyers. Despite challenges such as tax implications and market fluctuations, the demand for luxury real estate remains strong, fueled by wealth creation and changing market dynamics. As prices continue to reach record levels, the ultra-luxury segment is expected to maintain its momentum, attracting affluent buyers from around the globe.