Europe’s billionaires are enjoying a “new golden age” not seen since the super-rich of the Victorian era.
Each are worth £2billion, and their wealth has risen over the last year by 11.9 percent however, the cost of buying their private yachts has risen by just 6.5 percent, their super prime European homes by just 3.9 percent, their staff costs by 3 percent and their travel costs by 2.9 percent.
Europe’s billionaires typically have four homes, and London has increased its dominance as Europe’s top address for billionaires, with more than 140 now having a home in the capital.
On average this would be a £21.4million mansion, with the other three locations within a billionaire’s European property portfolio consisting of an £18.2million holiday home on the French Riviera, a £10.5million Tuscany estate and a £4.4million villa in the Greek islands.
These are just some of the findings from the latest Ultra Prime Barometer survey which looks across Western Europe at ultra-prime property values, billionaire lifestyles and billionaire property assets, produced annually by super prime specialists Beauchamp Estates in conjunction with market intelligence group Dataloft.
The annual survey uses property data and local market intelligence from Beauchamp Estates European office network and draws on information from Lonres and billionaire research from Wealth X/UBS Bank.
The latest survey revealed there are now 2,325 billionaires globally, worth £4.78trillion, up 7 percent on the previous survey. Of these, 775 billionaires worth £1.55trillion, live in Europe (up from 766 last year), more than any other region of the world. The average billionaire is now worth £2billion (up from £1.79billion at the time of the last survey), is aged 63 (93 percent are between 45-years-old and 75-years-old) and 89 percent are married with two children and a core “family unit” of nine close relatives.
The research discovered the average billionaire now invests £105million (5.1 percent) of their overall wealth in real estate, of which £62million (3 percent) is allocated as a budget for personal end-use homes, with the balance invested in rental or commercial properties.
Rather than simply residing in a city, coastal resort or rural location billionaires prefer what Beauchamp Estates describe as “luxury destinations”, where luxury homes are close to luxury shops, restaurants and leisure facilities. This is because whilst billionaires tend to lead busy and stressful work lives, at home they seek stress-free habitats where they can relax and be “pampered”.
The super-rich also tend to choose addresses where their friends reside.
The average billionaire has four homes in Europe costing them this year £54.5million, well within the £62million they typically allocate. The report found the cost of buying these super-prime homes has risen by 3.9 percent since the last survey was undertaken, but this is still far less than the 11.9 percent rise in billionaire’s overall wealth.
London is Europe’s top billionaire hotspot, with 72 billionaires (worth £116billion) naming the U.K. capital as their primarily base, up from 67 at the time of the last survey. More than 70 other billionaires have a second or third home in London, bringing the total with London residences to over 140 billionaires. This is more than any other city in the world, ahead of New York on 103, Moscow on 85, Hong Kong on 82, Paris on 33, Geneva on 23 and Madrid on 21.
Of the 72 billionaires whose primary base in London, 53 percent were born outside of the U.K.; 8 percent are female and 78 percent have self-made rather than inherited fortunes.
London’s billionaire residents enjoy sailing in the Mediterranean, with 32 percent owning or choosing to rent a super-yacht, often moored close to their villa.
The survey found that since most billionaires tend to live close to their immediate family (typically nine core members) a billionaire buying a home in London can potentially result in additional luxury homes bought in the city. These are for the use of adult children, other close relatives and staff, so a billionaire buying in a location can have a significant “added value” effect on the local luxury property market.
The Ultra Prime Barometer survey reveals that entering billionaire territory in London now has an entry level of £10million or more, with their typical home in the capital being in one of London’s six best addresses: Mayfair, Knightsbridge, Belgravia, St Johns Wood/Regents Park/Hampstead, St James’s and Holland Park.
The report highlights that a Mayfair mansion now costs £21.4million whilst one in St John’s Wood typically costs £17.6million.
Gary Hersham, of Beauchamp Estates observed: “Typically the rich don’t really look outside of these six addresses, and elsewhere the number of really super-rich drops dramatically.”
He noted that the top-end market for homes in London is polarised between those buying unmodernised homes to “do up” and those buying luxury “turn-key” assets.
In terms of price per square foot comparisons, London generally remains the most expensive location in Europe for buying a home, with property in Mayfair commanding values of circa £3,288 per sqft, as compared to £2,649 per sqft on the French Riviera, £1,073 per sqft in Tuscany and, believe it or not, just £581 per sqft in Mykonos.
Because buyers get substantially more space for their money in the Mediterranean compared to London, top European locations with easy access to luxury shops, hotels and leisure facilities remain extremely popular with super-rich buyers. Cannes, for example, bristles with many luxury boutiques and fine hotels, making the Riviera an extremely popular location.
Likewise parts of Tuscany, especially Forte di Marmi, are extremely popular with the super-rich, because it too has a plethora of luxury boutiques, antique shops and hotels.
Amongst the European beachfront, island and rural-estate holiday resorts, the French Riviera is the top property hotspot for billionaires with an estimated 46 having homes in the region (up from 39 at the time of the last survey), with other popular locations such as Tuscany, 16, Tel Aviv/Israel waterfront 14, and Greece and the Greek islands with 11 billionaires.
Beauchamp Estates highlighted that for pan-European billionaire purchasers, currency fluctuations play a large role in buyer’s “purchasing power”, so a U.K. based buyer purchasing a luxury home on the French Riviera currently will pay 15.5 percent less per sq ft than a year ago. Likewise they would pay 3.8 percent less per sq ft in Tuscany and 5.2 percent less in the Greek Islands.
In addition, Beauchamp Estates revealed that country specific property taxes and purchasing costs in Europe remain relatively low on an international comparison. For example, last year’s U.K. Stamp Duty changes in London mean that the average cost of purchasing a £10million home has resulted in purchase costs rising from 7.6 percent to 11.8 percent of the asking price. Given the overall 11.9 percent annual rise in billionaire wealth, the overall changes are unlikely to have any significant impact on billionaire buying patterns.
Property taxes and purchase costs in all four of the European billionaire hotspots remain below 14 percent of the asking price and on the French Riviera and the Greek Islands are as low as 6.9 percent and 8 percent respectively.
Hersham added: “As our report reveals, the world’s billionaires have become even richer over the last 12 months.
“The rise in billionaires is why currently there are now around half a dozen palatial private homes, each providing over 30,000 sq ft of living space, in the development pipeline across Prime Central London.
“London commentators often forget that in Russia, the Ukraine and Middle East, the homes of the super-rich are massive compared to traditional London homes. Palatial properties in places like Ukraine, Qatar and Saudi Arabia can be up to 150,000 sq ft in size so an 8,000 sq ft London townhouse is like a broom cupboard when compared to super-rich palaces elsewhere on the globe.
“This is why some adroit super-rich vendors are creating a new level in the London property market and private palaces that are a size level above anything currently for sale in the marketplace. They know that like a coveted painting the rarity value and quality of such a property will ensure that it holds and increases in value. There will always be super-rich buyers available for truly unique trophy mansions at this top 1 percent of the London housing market.”
Penelope Court, Partner at Beauchamp Estates, said: “We advise UHNWI buying homes in London and around the Mediterranean to set aside budgets of typically £55million to acquire the right properties.
“Most UHNWI buying in Western Europe see having an ultra-prime home in Prime Central London and on the French Riviera as “must have” badges, and this year this will cost them £40million.
“Others then decide they also want a Tuscan estate and a residence on the Greek islands which adds another £15million.”
Beauchamp Estates forecasted the billionaire homes bonanza is set to continue.
Over the last five years, the number of billionaires around the world has been growing at a rate of over 7 percent per annum, so by 2020 at the current rate of growth, there could potentially be over 3,870 billionaires around the world.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
