The international market for luxury property is booming, with millions of pounds being spent on high-end properties around the world. But what drives these buyers to invest in such properties, often without ever having seen them in person? The answer lies in the increasing demand for luxury properties among family offices and high-net-worth individuals. According to Knight Frank’s Wealth Report, 44% of family offices worldwide are now looking to increase their exposure to property, while Christie’s survey found that 74% of US real estate agents expect demand for luxury property to increase this year. Luxury property markets are popular with international investors, with both bustling cities and idyllic holiday destinations attracting buyers. In the US, New York and Los Angeles are competing for prestige sales, while in Europe, London, Rome, and Paris are the top destinations. Dubai, Singapore, and Cape Town are also magnets for the wealthy, while Caribbean properties remain in high demand for those seeking sun, sea, and sand. Malta, a relatively new European hotspot, is also gaining popularity, thanks to its citizenship schemes that enable wealthy investors to establish residency in the European Union. So, how do buyers invest in luxury properties through an auction? The process is quick and open, with all offers visible to everyone and no need for protracted negotiations with sellers or agents. There’s also the potential to secure the property at an attractive price, as buyers are expected to put down deposits, with sellers on the hook for legal fees and other penalties if they change their mind. One of the advantages of buying through an auction is the transparency it offers. Both buyers and sellers like that it’s much harder for either side to pull out after a sale is agreed. This, combined with the potential to secure the property at an attractive price, makes it an attractive option for many investors.
- Advantages of Buying Luxury Property through an Auction
Many luxury property auctions are still conducted in the traditional way, taking place in an auction house with buyers bidding in person. However, online auctions are increasingly frequent, offering a more convenient option for buyers. Either way, the auction house will provide a comprehensive package of materials to support buyers, including photography and videos, alongside basic due diligence material.
| Photography | Videos | Basic due diligence material |
| Virtual tour | Property history | Legal documents |
Some buyers may visit the property in advance of the auction, but many won’t. In fact, it’s estimated that 35-50% of properties are purchased sight unseen, depending on the market. However, this doesn’t mean that buyers should skip the due diligence process. Instead, they should carefully research the property’s background, including any potential issues or concerns. “Buyers must do their due diligence,” warns Paddy Pritchard-Gordon, director of buying agency Prime Purchase. “Look at the background of these properties – why are they for sale? Have a survey done as some properties, even luxury ones, can be in really bad order if they haven’t been lived in for a few years… Don’t forget to check the title and any other information that is available.”
Another critical consideration is finance. Buyers will need to have funding in place for their purchase, with a deposit of 10% often payable immediately after the auction concludes. They should also be aware that there may not be time to start a mortgage application. “Speed is of the essence,” says Amadeus Wilson, director of auction finance specialist SPF Short Term Finance. “Get everything lined up beforehand and have a decision in principle in place. This will also help prevent you from over-bidding as you will know how much you can afford to spend.”
In conclusion, the global luxury property market is booming, with many investors willing to invest in high-end properties without ever having seen them in person. The advantages of buying through an auction, including transparency and potential to secure the property at an attractive price, make it an attractive option for many buyers. However, it’s essential to do thorough research and have a solid understanding of the financial implications involved. With careful planning and preparation, buyers can navigate the luxury property market with confidence.
“The luxury property market is becoming increasingly global, and the auction process is becoming more transparent and accessible.”
— Chad Roffers, CEO of Concierge Auctions
| Location | New York |
| Property Type | Apartment |
| Price | $5 million |
Key Takeaways:
• The global luxury property market is booming, with many investors willing to invest in high-end properties without ever having seen them in person. • The advantages of buying through an auction, including transparency and potential to secure the property at an attractive price, make it an attractive option for many buyers. • Buyers should do thorough research and have a solid understanding of the financial implications involved. • Careful planning and preparation are essential to navigating the luxury property market with confidence. For those interested in investing in luxury properties through an auction, it’s essential to:
• Research the property’s background and potential issues. • Have a solid understanding of the financial implications involved. • Get everything lined up beforehand and have a decision in principle in place. • Be aware of the potential for over-bidding. By following these tips, buyers can navigate the luxury property market with confidence and make informed investment decisions.
