The potential market for luxury property has never been bigger.
In our most recent research report, The Allure of the Second Home: Why Affluent Buyers are Displaying Confidence in Resort Markets, we explore the current state of the second home market, as it relates to the affluent consumer, focusing on the top 10% and above income earners in 26 countries, who are in the market to buy or sell a second or vacation home in the next three years.
Who is Considering Buying and Selling?
Buyers, age 40 and younger, are taking over the luxury second home market, but lack the experience of Gen X and Boomers
Luxury second home buyers and sellers have similar demographic profiles in terms of age, geography, education and professional status. As a result, their financial profiles are similar, with the only noticeable difference being that sellers have slightly higher asset levels.
Interestingly, this group has notably high assets for their age. About half of the qualified consumer market is under the age of 40, yet their aspirations for purchase are in the millions of dollars.
For most, this is not their first time purchasing a second home—the average number of residences is over three and 14% own at least five residences currently. Driven not by the Millennial group, but rather by Gen X and Boomers. Of Gen X luxury second home buyers, 17% have more than five homes, along with 19% of Boomers in this buyer group.
Current State of the Resort and Second Home Market
Affluent consumers are in acquisition mode
Those who are in the market to purchase a luxury second home are adding to their portfolio and unlikely to sell their existing second home at the moment—thus there are more buyers than sellers. Interestingly too, this means that sellers are also buyers, but buyers are not necessarily sellers.
Buyers show more confidence in the market than sellers. More than half of buyers believe that now is a good time to purchase a second home, while relatively few think it is a good time to sell. As noted previously, these consumers are quite savvy when it comes to homeownership; 76% own two or more properties currently.
What are Second-Home Buyers Looking for?
Wellness is the New Luxury
Affluent consumers have begun living with wellness in mind and this also influences the second home market. In fact, 96% take at least one aspect of wellness seriously as part of their daily routine. Beyond physical and emotional wellness, which most affluent consumers focus on, luxury buyers are keen to improve their intellectual, social and even spiritual wellness.
Amenities that address these needs are sought by buyers and especially resort and second home buyers because of a growing demand for communities that take a holistic approach to overall wellness.
The Bottom Line
With more buyers than sellers, the demand for second homes is keeping home values high for luxury properties. Younger buyers are becoming more prominent, currently making up nearly half of the market, however, older generations have more experience buying second homes. Multiple residences, as well as customized experiences, including wellness amenities becoming a priority.
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