[Super Rich] 'High-Interest Bomb' Hits New York Penthouse

UK Knight Frank Survey
13% Decrease in Ultra-High-End Home Sales in Q2

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As high interest rates persist, the ultra-luxury housing markets in major cities around the world are also taking a hit.

According to Knight Frank, a UK real estate consulting firm, on the 13th (local time), tracking 12 major cities worldwide showed that ultra-luxury home sales in the second quarter of this year decreased by 13% compared to the same period last year. The firm's definition of ultra-luxury homes refers to properties with an asking price of over 10 million USD (approximately 13.3 billion KRW).

As of June this year, the total sales amount of ultra-luxury homes over the past year fell below 30 billion USD (approximately 40 trillion KRW), shrinking by 26.3% compared to the booming market in 2021 (40.7 billion USD, about 54 trillion KRW). However, the transaction volume is still higher than in 2019, before the COVID-19 pandemic (18.6 billion USD, about 25 trillion KRW).

The tightening policies of central banks in various countries are analyzed to have dealt a significant blow to the ultra-luxury housing market. The ultra-luxury housing market sought by the super-rich flourished along with the general housing market due to liquidity supply policies by central banks worldwide after COVID-19.

Looking at individual cities, in New York, USA, homes priced over 10 million USD traded about 1.142 billion USD (approximately 1.51 trillion KRW) in the second quarter of this year. This is a 25.7% decrease compared to the same period last year. London, UK saw a 17% decrease, and Los Angeles (LA), USA experienced a 67.2% drop. Hong Kong and Singapore also saw their transaction volumes shrink by approximately 23.1% and 3.0%, respectively.

Recently in New York, the asking price for the penthouse at Central Park Tower, located in Manhattan's prime area known as the 'Billionaire's Row,' has dropped, attracting attention. According to Bloomberg News, the real estate developer initially listed this condo for 250 million USD (about 332 billion KRW), but with no buyers, the asking price was lowered by 22% to 195 million USD (about 259 billion KRW).

On the other hand, ultra-luxury home transactions increased in Dubai, United Arab Emirates (UAE), and Sydney, Australia. Especially in Dubai, due to tax-free benefits attracting the super-rich, ultra-luxury homes traded about 1.582 billion USD (approximately 2 trillion KRW) in the second quarter of this year. This is roughly double the volume from a year ago (797 million USD, about 1 trillion KRW).

Bloomberg News reported, "After the outbreak of COVID-19, the ultra-wealthy increased their purchases of second homes with larger houses and resort facilities, but now this market is beginning to cool down again," adding, "The global high interest rates are also impacting the top-tier real estate markets."

This content was produced with the assistance of AI translation services.