New York has been knocked of the top of millionaires favorite homes list.
According to Douglas Elliman and Knight Frank’s 2019 Wealth Report, New York City scored the number two spot on the Wealth Index that factors how many ultra-high net work individuals are living here, the volume of investments made in the city, and the lifestyle of the richest city dwellers.
The Big Apple was dethroned by London, which ranked number one despite fears of Brexit’s economic impact.
According to the new Wealth Index, the world will have 43,000 more people worth more than $30 million by 2023, a 22 percent growth over the next five years. Most of that growth comes from countries such as India, Philippines and China. .
With all those millionaires, 29 percent of them are considering a second passport, and 22 percent are looking to buy residential property in other countries.
To understand where those millionaires are looking, the report utilizes its prime international residential index or PIRI.
For the US, New York City is experiencing slow growth, but other American cities are seeing positive numbers. From the PIRI, San Francisco and Los Angeles saw more than five percent growth each, with Miami seeing three percent growth. European cities including Paris and Berlin saw six percent growth each.
But it was Boston that knocked it out of the park with 8.1 percent growth in its luxury residential market performance.
“Because of the educational and medical facilities in and around Boston, education purposes have become very popular,” Howard Lorber, Douglas Elliman’s chairman, said of the city’s recent growth. “And [Boston] was always way behind the market of New York and other big cities.”
Boston has carved out a name for itself as an “attractive and relatively affordable alternative” city to invest in compared to New York. The report detailed that the population is less dense and is surrounded by a vast talent pool from Ivy League universities, like Harvard and MIT.
While California has always been a strong residential alternative to New York, Florida is popping up as a popular option for the wealthy to move to or investin.
According to the report, neighborhoods such as Delray Beach, Florida, were strong potential hotspots due to its location between Palm Beach and Fort Lauderdale, with many people from New York, Canada and Europe buying property due to the low tax rates and tropical-like climate.
“Florida wasn’t that strong in condominiums, but it was strong in single family home sales, which indicates to us that there are families and people moving to Florida, most likely something to do with the SALT issues in the high tax states like here,” Lorber explained, referencing the high state and local taxes in states like New York.
While New York experienced a slow year of corrections, Lorber said it will be some time before the city’s residential market hits a bottom.
“I don’t think we can be at the bottom until prices come down and the inventory is bought up and they’ll start going up again when people can’t find what they want,” Lorber said. “Right now, there’s a lot of choices and people are expect discounts today, they’re in that mindset.”