State of Luxury Real Estate - 2021 by Charter One Realty

SAN JOSE DEL CABO, MEXICO | $2,899,000

SOLRE 2021

STATE OF LUXURY REAL ESTATE THE RESIDENTIAL LUXURY MARKET IS POISED TO HAVE A BANNER YEAR AS DEMAND FUELS GROWTH AT THE TOP

Table of Contents President’s Welcome

Letter Executive Summary

Neighborhood Characteristics in Total

Residence Characteristics in Total

Neighborhood Characteristics by Price Point

Residence Characteristics by Price Point

Luxury Buyer Trends in Asia Pacific

The Five Pillars Among Luxury Buyers

Market Demand and Pricing

Methodology

Expectations for the Luxury Market: Buyers From Asia Pacific

Definitions Within This Report

Detailed Tables on Asia-Pacific Luxury Buyers

Asia-Pacific Luxury Buyer Profile: Demographics and Finances

Asia-Pacific Luxury Buyer Profile: Passions and Luxury Lifestyle

Traditional Real Estate Companies Versus Disruptors 14

Neighborhood Characteristics in Total

Buyers Prefer Traditional Providers

Residence Characteristics in Total

Neighborhood Characteristics by Price Point

Residence Characteristics by Price Point

Affluent Consumer Attitude And Behavior Trends For 2021 Real Estate is a Wise Investment

9 10 15

Winning New Business: Deliver on the Basics Then Refine for Your Audience

Five Pillars in the Luxury Buyer Mindset Work, Live, and Play at Home Freedom of Movement Self-Reliance Embracing Spontaneity Financial Confidence

19 22 24 28 30 32

Luxury Real Estate Market Update

Overall Interest in Buying a Residence: White Hot

Price Range Consideration

Great Expectations

Investment Properties Make Up a Sizable Portion of the Luxury Market

New Construction in New Neighborhoods

Make Room for the Pod

Neighborhood Characteristics by Country

Residence Characteristics by Country

Luxury Buyer Trends in Europe

The Five Pillars Among Luxury Buyers

Market Demand and Pricing

Expectations for the Luxury Market: Buyers From Europe

101

Detailed Tables on Luxury Buyers Europe

104

Luxury Buyer Europe Profile: Demographics and Finances

105 106

Neighborhood Characteristics by Country

Residence Characteristics by Country

Luxury Buyer Europe Profile: Passions and Luxury Lifestyle

Luxury Buyer Trends in North America

Neighborhood Characteristics in Total

107

The Five Pillars Among Luxury Buyers

Residence Characteristics in Total

109

Market Demand and Pricing

Neighborhood Characteristics by Price Point

111

Residence Characteristics by Price Point

113

Neighborhood Characteristics by Country

115

Residence Characteristics by Country

117

Expectations for the Luxury Market: Buyers From North America

Detailed Tables on North America Luxury Buyers

Luxury Buyer North America Profile: Demographics and Finances

Luxury Buyer North America Profile: Passions and Luxury Lifestyle

Key Takeaways for Real Estate Professionals

120

Market Trends

121

Consumer Trends & Brand Salience

122

STATE OF LUXURY REAL ESTATE 2021 | 2

VITZNAU, SWITZERLAND | PRICE UPON REQUEST

PRESIDENT’S WELCOME STATE OF LUXURY REAL ESTATE 2021 | 3

President’s Welcome

STATE OF LUXURY REAL ESTATE SOLRE 2021

I pen this note with great expectations for 2021 not only for the luxury real estate business, but for us as individuals who have aspired, persevered and even thrived through 2020, a year that asked for more than any in recent memory. The COVID-19 coronavirus pandemic has affected nearly all aspects of daily life and brought with it challenge, change and uncertainty. The negatives cannot be understated, but there are new possibilities that have come from adapting to a changed world. Adoption of a digital lifestyle is now nearly universal, with affluent consumers across ages embracing technology at an unprecedented rate. The ramifications are wide-ranging not just in daily life, but also in real estate. The use of video for tours and meetings, e-signing services for proper documentation, and enhanced digital listings became necessary to continue doing business. The changes have largely been good for consumers and it is up to us to embrace and improve them where possible. Luxury Portfolio International® is committed to you, our members, to deliver the high-quality services that you have come to expect

from us. This year we are increasing our focus on learning and education through research, events and knowledge sharing. You are reading the first research report of 2021 titled The State of Luxury Real Estate (“SOLRE”). The first study of its kind, we commissioned Affluent Consumer Research Company, a specialty market research firm dedicated to studying affluent consumer opinions and activities globally, to interview thousands of topearning individuals in 17 countries to bring you the voice of the consumer. My thanks to Chandler Mount, CEO of Affluent Consumer Research, for his hard work and diligence. WE HOPE YOU ENJOY reading this report. It is not your standardissue whitepaper, but a detailed insight into how the luxury real estate ecosystem is evolving in key markets worldwide and what motivates affluent consumers in their home buying and selling decisions. Applying these insights will help you make smarter decisions in a year where the ordinary will have to be done extraordinarily well to stand out. Mickey ALAM KHAN | President, Luxury Portfolio International®

STATE OF LUXURY REAL ESTATE 2021 | 4

Executive Summary Market Trends

Consumer Trends

Brand Salience

Real estate is the leading investment category of the day. Luxury Buyer sentiment to real estate is a strong “Buy,” and also has the lowest inclination to “Sell.” One-quarter of Global Luxury Buyers have investment or rental property in mind for their next purchase. Overall, consumer expectation is that their own property values will continue to rise and that the pool of buyers is likely to grow faster than those willing to sell.

Three trends borne out from extended time at home: Working from home for all members of the household, a heightened need for self-reliance at home, and recognition that spontaneity brings a welcome break. Luxury homes can provide solutions for emerging needs, and those factors are in demand.

Traditional real estate companies maintain control over the majority of the affluent consumer market but technology-based disruptors are making inroads. The quick shift to technology-based solutions experienced in 2020 may be the kind of transformative action traditional firms need to compete with disruptor companies. In the end, the luxury customer is more interested in high quality offerings and customer service — the basics — than low price. The Ultra-Luxury segment values brands that feature corporate citizenship, reputation and loyalty.

Affluent consumer financial confidence is high, but not without reservation. The growth in wealth has been well documented. Luxury Buyers have a strong balance sheet today and uncertainty ahead. It may be time to take some winnings off the table to mitigate unquantifiable risk. Globally, over the next three years, we estimate 15.5 million affluent households, and 10.3 million at the luxury segment, are in the market to buy. Buyer interest outpaces sellers by 3:2, meaning opportunities abound for developments and existing homes alike. New construction in newly developed neighborhoods is the No. 1 global preference and it commands the highest price.

The golden passport is a powerful motivator for Luxury Buyers in Mexico, India, China and post-Brexit United Kingdom. When pressed on it, International Luxury Buyers are more likely to cite non-financial reasons to live abroad: education and COVID-19 response are tops on the list. Luxury Buyers are planning for extended shelter-inplace. Expectations are high that over the coming year more time will be spent at home. Perhaps taking a page from New Zealand’s policy toward “pod” or “quaranteam” living, about half of Luxury Buyers are seeking a residence with accommodations for long-term guests. Whatever their individual reason, the result is, in essence, preparation for non-household members to shelter with them.

STATE OF LUXURY REAL ESTATE SOLRE 2021

STATE OF LUXURY REAL ESTATE 2021 | 5

CONSTANTIA, UPPER CAPE TOWN, SOUTH AFRICA | R32,000,000

METHODOLOGY

STATE OF LUXURY REAL ESTATE 2021 | 6

Methodology The State of Luxury Real Estate 2021 (SOLRE) study was conducted by Affluent Consumer Research Company, with online interviews in 17 countries from November 25–December 16, 2020. Qualified respondents are among the top 1–5% of their nation’s economy, based household income; approximately USD $250,000 equivalent in local currency.

25,000+

Affluent consumers invited to participate in the research

Minutes in duration on average

±2%

3,125

Completed the interviews

50%

Completed on a mobile device

30.49 million

Households represented from the countries interviewed Household estimates are extrapolated from government statistical bureaus and World Bank data for income/consumption share. China and India estimates are based on urban dwellers to adjust for income distribution patterns.

MARGIN OF ERROR AT THE 95% CONFIDENCE LEVEL

If the study were conducted 100 times we would expect that in 95 cases the results would fall within 2% of the data presented here. Indices presented in this report are combinations of scaled questions. In all cases the scale runs from 0 to 100 with higher scores indicating greater interest/acceptance of the idea. Items at or above 50 indicate moderate to strong acceptance.

Global Affluent

Luxury Buyers: USD $1 Million or More

Luxury Buyers Margin of Error

Asia Pacific

1,307

764

±4%

North America

1,201

315

±6%

617

227

±7%

Total Completed Interviews

Europe

Grand Total

3,125 1,306

±3%

STATE OF LUXURY REAL ESTATE 2021 | 7

Methodology

Definitions Within This Report Global Affluent The total sample across all regions Asia Pacific Affluent from Australia, China, India, Indonesia, Japan, New Zealand, South Korea, Singapore, or Taiwan North America

Under $1M; $1M to $4.9M; $5M to $9.9M; $10M or more In the market to purchase a residence at this price range in the next 3 years (asked in local currency; M stands for million in USD) All Other USD $250K+ This is the Global Affluent who are not in the market to buy a Luxury residence in the next 3 years

Luxury Buyers Affluent consumers in the market to purchase residential real estate in the next 3 years, with an estimated value of USD $1 million or more Ultra-Luxury Buyers Are in the market to buy at USD $10 million or more

Affluent from Canada, Mexico, or United States Europe Affluent from France, Germany, Italy, Spain, or United Kingdom

STATE OF LUXURY REAL ESTATE 2021 | 8

WAILUKU, HI, USA | $12,800,000

TRENDS FOR 2021 AFFLUENT CONSUMER ATTITUDE AND BEHAVIOR

STATE OF LUXURY REAL ESTATE 2021 | 9

Trends for 2021

Real Estate is a Wise Investment

Implications:

Luxury Buyers the world over have a positive view of real estate as an investment right now. Relative to other investment categories, real estate is top in overall “Buy” sentiment, topping other leading categories of stocks, ESG-oriented investments,1 private equity and gold. Real estate also has the largest positive gap between “Buy” and “Sell” sentiment, indicating solid footing for the future as well. At a time when financial investments are moving — for seemingly unknown reasons — there is comfort and confidence in owning physical property. Take for example the resurgence of Bitcoin which (as of January 10, 2021) has more than doubled its peak. If consumers are willing to take on such risky investments, it stands to reason that predictable, tangible assets would rise with it as a balance. Opinion: Real Estate as Investment g BUY

g SELL

g HOLD

g NOT SURE

The manifest value of real estate is highly appreciated by Luxury Buyers at the moment. There may be pressure to rush into a purchase just to have a stake in the game, but long-term thinking around asset appreciation is critical in times like this.

50% 37%

How would you rate real estate as an investment right now?

34% 17% GLOBAL AFFLUENT

12%

20%

37%

30%

26% 4%

BUYERS: USD $1 MILLION OR MORE

15%

17%

ALL OTHERS USD $250K+

SG stands for Environment, Social and E Governance investments, defined by the Financial Times as a generic term used in capital markets and used by investors to evaluate corporate behavior and to determine the future financial performance of companies. ESG are a subset of non-financial performance indicators which include sustainable, ethical and corporate governance issues such as managing a company’s carbon footprint and ensuring there are systems in place to ensure accountability.

STATE OF LUXURY REAL ESTATE 2021 | 10

Trends for 2021

Real Estate is a Wise Investment

Implications:

(CONTINUED)

A global shift in demand for Real Estate as an investment category could spark appreciation in other related categories such as commodities and building materials. Luxury products such as decor and artwork may also rise as new homes are outfitted for living.

Luxury Buyers by Region g BUY

g SELL

g HOLD

g NOT SURE

53%

47%

46%

19%

25%

ASIA PACIFIC

31%

24% 25% 4%

3% NORTH AMERICA

16%

How would you rate real estate as an investment right now?

EUROPE

STATE OF LUXURY REAL ESTATE 2021 | 11

Trends for 2021

Real Estate is a Wise Investment

Implications:

(CONTINUED)

Opinion: Cryptocurrency as Investment g BUY

g SELL

g HOLD

g NOT SURE

53% 42% 21% 20% 17% GLOBAL AFFLUENT

34% 24% 23%

19%

BUYERS: USD $1 MILLION OR MORE

15% 18% 15%

Luxury Buyers are substantially more familiar with cryptocurrency than the average affluent consumer, and have a hedged, if not favorable, view of it. As company valuations separate from traditional indicators, new investment categories may be a source for new buyers in the not-sodistant future.

How would you rate cryptocurrency as an investment right now?

ALL OTHERS USD $250K+

STATE OF LUXURY REAL ESTATE 2021 | 12

Trends for 2021

Real Estate is a Wise Investment

Implications:

(CONTINUED)

The run-up of Bitcoin’s value began in Q4-2020, coinciding with rising COVID-19 cases globally, U.S. election rhetoric and fallout, and Brexit’s Trade and Cooperation Agreement, to name a few. As U.S. and APAC stocks soared, so too did demand for alternative investments.

Bitcoin to USD Market Value 40,000

1/10/21 $40,670

35,000 30,000 25,000 20,000 15,000 10,000

How would you rate bitcoin as an investment right now?

5,000 0 1/1/17

1/1/18

1/1/19

1/1/20

1/1/21

Source: Quandl Bitcoin to USD Market Value

STATE OF LUXURY REAL ESTATE 2021 | 13

ILLUSTRATED PROPERTIES FLORIDA?????

TRADITIONAL REAL ESTATE COMPANIES VERSUS DISRUPTORS

STATE OF LUXURY REAL ESTATE 2021 | 14

Trends for 2021

Buyers Prefer Traditional Providers

Implications:

Most buyers are planning to work with tried-and-true companies during their next real estate purchase, namely the traditional broker/agent or auction house. Traditional companies are the dominant choice globally but considering the newness of disruptors in the market consumer adoption levels are high at about one-in-five. AMONG THOSE IN THE MARKET TO BUY | Type of Real Estate Company Likely to Work With g TRADITIONAL COMPANY

g DISRUPTOR

(BROKER/AGENT/AUCTION)

17%

11% 4%

GLOBAL AFFLUENT

g NOT APPLICABLE — WILL NOT USE COMPANY

74%

70%

68%

g NOT SURE

(ONLINE AGENCY)

65%

19%

21%

18% 9% 2%

LUXURY BUYERS

63%

7% 1% ASIA PACIFIC

18% 11% 2%

NORTH AMERICA

14% 5%

EUROPE

Traditional firms remain in the driver’s seat with the bulk of consumers opting for familiar and trustworthy sources when buying real estate. Disruptors (online agencies) are relatively new and are still establishing themselves a credible option to most Luxury Buyers today. To maintain this lead personal brands must maintain personal connections — networking, affinity marketing, and being a trusted source — while keeping current with technology. What type of real estate company are you most likely to use for these transactions, if any?

STATE OF LUXURY REAL ESTATE 2021 | 15

Trends for 2021

Winning New Business: Deliver on the Basics Then Refine for Your Audience For service companies to compete for Luxury Buyer’s business they must be able to demonstrate proficiency with the highest quality offerings and customer service. While no doubt important to a brand overall, other factors quickly lose power to draw a customer in. It is not as easy as offering the lowest cost or best loyalty schemes, since these are relatively weak factors in choosing a service company — particularly with European Luxury Buyers. Luxury Buyers put “the basics” front and center — reputation, adapting to new technology, and relationships where they feel comfortable.

Implications: Beyond the fundamentals, the areas offering the most upside are adapting to new technology (to offset advantages of online agencies) and to have a brand centered around its value in the community. Corporate social responsibility is equal to brand reputation in the eyes of Ultra-Luxury Buyers and investment in this area is likely to pay dividends for years to come.

STATE OF LUXURY REAL ESTATE 2021 | 16

Trends for 2021

Winning New Business: Deliver on the Basics Then Refine for Your Audience (CONTINUED)

Average Score Scaled to 100 Within Each Respondent In Decision to Work With a Service Company by Global Affluent and Luxury Buyers g GLOBAL AFFLUENT

70%

67%

g BUYERS: USD $1 MILLION OR MORE

67%

HIGHEST QUALITY OFFERING

56%

57%

67%

CORPORATE CITIZENSHIP: SOCIAL RESPONSIBILITY AND SUSTAINABILITY CENTRAL TO THE BRAND

68%

65%

64%

CUSTOMER SERVICE: SPEED OF RESPONSE, PERSONAL TOUCH

55%

56%

69%

LOYAL TO THE BRAND OR EMPLOYEE WHO WORKS FOR THE BRAND

g USD $10 MILLION OR MORE

64%

62%

72%

REPUTATION: RECOGNIZED LEADER IN THE INDUSTRY

48%

51%

55%

LOYALTY PROGRAM: EARN REWARDS FOR CONTINUED BUSINESS

62%

61%

52%

ADAPTING TO NEW TECHNOLOGY

46%

36%

LOWEST COST

56%

54%

50%

EMPLOYEES EMBODY SIMILAR VALUES TO MY OWN

46%

58%

PROVENANCE: STORY OF THE BRAND’S FOUNDING

STATE OF LUXURY REAL ESTATE 2021 | 17

Trends for 2021

Winning New Business: Deliver on the Basics Then Refine for Your Audience (CONTINUED)

Luxury Buyers g ASIA PACIFIC

64%

69%

g NORTH AMERICA

72%

HIGHEST QUALITY OFFERING

58%

57%

53%

CORPORATE CITIZENSHIP: SOCIAL RESPONSIBILITY AND SUSTAINABILITY CENTRAL TO THE BRAND

61%

g EUROPE

70%

72%

CUSTOMER SERVICE: SPEED OF RESPONSE, PERSONAL TOUCH

55%

61%

50%

LOYAL TO THE BRAND OR EMPLOYEE WHO WORKS FOR THE BRAND

58%

69%

66%

REPUTATION: RECOGNIZED LEADER IN THE INDUSTRY

50%

53%

52%

LOYALTY PROGRAM: EARN REWARDS FOR CONTINUED BUSINESS

57%

64%

69%

ADAPTING TO NEW TECHNOLOGY

46%

48%

44%

LOWEST COST

52%

58%

57%

EMPLOYEES EMBODY SIMILAR VALUES TO MY OWN

41%

53%

54%

PROVENANCE: STORY OF THE BRAND’S FOUNDING

How important are these factors in your decision to work with a service company? By service company we mean one that gives professional advice or agency, rather than sells a physical product. For example, real estate brokers, investment advisors and accountants, etc. Select one answer for each row.

STATE OF LUXURY REAL ESTATE 2021 | 18

WHISTLER, BRITISH COLUMBIA, CANADA | C$12,950,000

FIVE PILLARS IN THE LUXURY BUYER MINDSET

STATE OF LUXURY REAL ESTATE 2021 | 19

Trends for 2021 — Five Pillars

Five Pillars in the Luxury Buyer Mindset

WORK, LIVE, AND PLAY AT HOME Interest in working from home or second home in the future Expect to spend more time working from home

FREEDOM OF MOVEMENT

SELF-RELIANCE

EMBRACING SPONTANEITY

Interest in having a second passport

My need for personal security is increasing

I do not like surprises (low)

Interest in reducing tax burden

I am interested in having dual citizenship

Interest in improving home security

I want more fun things to do at home

Confidence in household’s current financial strength

Interest in having control over physical environment

My job makes it easy to live anywhere

FINANCIAL CONFIDENCE

Interest in retiring early from work Unconcerned with longterm economic security

GLOBAL INDEX

Note: Numbers are an index from 0–100 where a low number is less intensity and high is greater intensity

STATE OF LUXURY REAL ESTATE 2021 | 20

Trends for 2021 — Five Pillars

Five Pillars in the Luxury Buyer Mindset

(CONTINUED)

Indices by Luxury Buyer Intentions

WORK, LIVE, AND PLAY AT HOME

FREEDOM OF MOVEMENT

SELF-RELIANCE

EMBRACING SPONTANEITY

FINANCIAL CONFIDENCE

62 50

52 32

65 54

51 49

57 62

LUXURY BUYERS

ALL OTHERS USD $250K

LUXURY BUYERS

ALL OTHERS USD $250K

LUXURY BUYERS

ALL OTHERS USD $250K

LUXURY BUYERS

ALL OTHERS USD $250K

LUXURY BUYERS

ALL OTHERS USD $250K

Note: Numbers are an index from 0–100 where a low number is less intensity and high is greater intensity

STATE OF LUXURY REAL ESTATE 2021 | 21

Trends for 2021 — Five Pillars

Work, Live, and Play at Home Perhaps “the” number one trend coming out of 2020 is the shift in time spent inside the home. For the Global Affluent more than half expect it to continue throughout 2021, particularly the Luxury Buyer. As a result, the home (or in some cases the second or vacation home) is being repurposed for use during the pandemic. Cautious people have moved from more densely populated areas to less, and really have not missed a beat. Most agree that their job makes it easy to live anywhere and with the rapid shift to practically everyone working, learning, living, and playing at home it’s likely this trend will continue. Data from global research firm YouGov shows that general consumer “fear of catching COVID-19” is well above the summer lows, and equal to the rates measured in February through April of 2020. What’s more, as wealth levels increase so too does the interest in spending more time at home. Ultra-Luxury Buyers achieve 67 on the index. Shelter-in-place has made lasting changes to how consumers use their home. Luxury Buyers are not satisfied by doing more with less so expect a longer musthave list on their next home.

54 62 GLOBAL AFFLUENT

LUXURY BUYERS

56% 74% GLOBAL AFFLUENT

% AGREE: MY JOB MAKES IT EASY TO LIVE ANYWHERE

LUXURY BUYERS

56% 75% GLOBAL AFFLUENT

INDEX

WORK, LIVE, AND PLAY AT HOME

% AGREE: I EXPECT TO SPEND MORE TIME WORKING FROM MY HOME NEXT YEAR

LUXURY BUYERS

STATE OF LUXURY REAL ESTATE 2021 | 22

Trends for 2021 — Five Pillars

Work, Live, and Play at Home

(CONTINUED)

There is a substantial difference for Luxury Buyers from the Global Affluent population on their interest in continuing at-home base of operations. While about one-in-seven have already transitioned to working full time at home, 65% are interested in doing so. Luxury Buyers are more likely than the average to say it is a top interest (30% versus 21%) and less likely to express no interest at all (4% versus 17%).

How interested are you in… Working from home/second home in the future? Global Affluent

15%

Implications: Space at home for long-term self-sufficiency is a must. Luxury Buyers are more interested in technology solutions than most, and also require plenty of open space and diversions nearby to keep the family happy. High scores on the Work, Live, and Play at Home index relate to interest in the following next-home features and amenities. Neighborhood Co-working spaces Airport Golf course

Residence Self-sufficient* Smart home

Bathtub, hot tub or spa

Home theatre

Dual key residence

Swimming pool

Outdoor living area

Luxury Buyers

15% 4%

17%

21%

17%

30%

16%

35%

30% g NOT AT ALL INTERESTED g CURIOUS TO LEARN MORE g INTERESTED IN DOING g THIS IS A TOP INTEREST FOR ME g HAVE ALREADY DONE THIS

* Can stay at home for longer periods of time.

STATE OF LUXURY REAL ESTATE 2021 | 23

Trends for 2021 — Five Pillars

Freedom of Movement Travel has long been a core feature of the affluent lifestyle. It remains the number one passion and has been effectively curbed in 2020 except in special circumstances. Vacation travel has long served as a feeder market for second and vacation home buyers and demand for vacationing has been growing throughout the lockdown periods. The expectation is that once travel is deemed safe the Global Affluent will do so, and with gusto. What was once a dark cloud in 2020 is poised to be a silver lining in the years to come. If there were an affluent “bill of rights” the Freedom of Movement would be in the top 5 most important freedoms. For the Ultra-Affluent consumer, some have shifted their primary residence to a farflung locale to pass their quarantine in the surf and sand at a five-star resort. Others are taking advantage of second homes they already have. In the context of luxury real estate, Freedom of Movement is well expressed as having citizenship in more than one country. As one might expect, those looking to buy property outside their home country also score the highest on this trend index. For three-quarters (76% of International Luxury Buyers) dual citizenship is an interest and in fact many have already achieved this distinction or are keen to do so. Freedom of Movement is highly regional in nature with buyers in developing-economies showing greater interest in having the golden passport.

INDEX

FREEDOM OF MOVEMENT

GLOBAL AFFLUENT

LUXURY BUYERS

LUXURY BUYERS: LIKELY TO BUY INTERNATIONAL PROPERTY

AGREE: I AM INTERESTED IN HAVING DUAL-CITIZENSHIP

43%

65%

76%

GLOBAL AFFLUENT

LUXURY BUYERS

LUXURY BUYERS: LIKELY TO BUY INTERNATIONAL PROPERTY

STATE OF LUXURY REAL ESTATE 2021 | 24

Trends for 2021 — Five Pillars

Freedom of Movement Freedom of movement

GLOBAL AFFLUENT India 61.3 Taiwan 52.8 50.3

(Australia, New Zealand, Indonesia)

China 47.5 France 43.8 Canada 40.7 United Kingdom

(CONTINUED)

LUXURY BUYERS

Mexico 67.7

Pacific Islands

Mexico India United Kingdom China LUXURY BUYER AVERAGE Italy + Spain France + Germany United States + Canada SE Asia + Oceania East Asia (Ex China)

Luxury Buyers 70.2 63.8 60.2 54.7

39.4

Average 38.6 Germany 37.3

Mexico 70.2 52.3

51.7 India 63.8 50.3

46.3 United Kingdom 46.2 44.6

60.2

China 54.7 Average 52.3 Italy + Spain

51.7

France + Germany

50.3

USA + Canada

46.3

SE Asia + Oceania

46.2

East Asia (Ex China) 44.6

Italy 37.0 Singapore 36.5 Spain 31.0 South Korea

31.0

United States

30.2

Freedom of Movement Global Average = 38.6

Japan 27.6

STATE OF LUXURY REAL ESTATE 2021 | 25

Trends for 2021 — Five Pillars

Freedom of Movement

(CONTINUED)

How interested are you in having a passport from another country? Global Affluent

11% 13%

Luxury Buyers

13% 9%

30%

23%

22%

18%

24%

22% 23%

Luxury Buyers Likely to Buy International Property

26% 33%

32%

For Luxury Buyers likely to move internationally, non-financial factors are a higher priority when choosing to move abroad, top among them: education, COVID-19 response, culture/history, pathway to dual citizenship, better healthcare, and lower rates of crime. Financial incentives are certainly part of the desire to move internationally, but are lower priority (e.g., business-friendly environment, favorable taxes, and a strong economy).

g NOT AT ALL INTERESTED g CURIOUS TO LEARN MORE g INTERESTED IN DOING g THIS IS A TOP INTEREST FOR ME g HAVE ALREADY DONE THIS

STATE OF LUXURY REAL ESTATE 2021 | 26

Trends for 2021 — Five Pillars

Freedom of Movement

(CONTINUED)

Implications: The implication is that lifestyle will not be sacrificed for the move. For many this means building a strong social network in a new country. The most desirable features are ones that facilitate socializing and networking for the entire family. High scores on the Freedom of Movement index relate to interest in the following next-home features and amenities. Neighborhood Co-working spaces

Resort community

Golf course

New development

Bikeable

Medical facilities

Airport

Gated community

Schools

Sailing/yachting club

Residence Concierge or valet services

Game room

On-property guest house

STATE OF LUXURY REAL ESTATE 2021 | 27

Trends for 2021 — Five Pillars

Self-Reliance Luxury Buyers stand out on the Self-Reliance index compared to the total affluent population. In fact, as wealth and next-home value rise so too does the index score. At the Ultra-Luxury price point (USD $10 million or more) the index rises to 73 signaling this trend as being very important for high-wealth buyers. As with financial security, personal security is a major issue in the pandemic era, as the gap between the haves and the have nots widens. A counterbalance to the widening gap, improving home security gives the Luxury Buyer a sense of control and comfort in otherwise unsteady times.

57 65 GLOBAL AFFLUENT

LUXURY BUYERS

58% 79% GLOBAL AFFLUENT

INDEX

SELF-RELIANCE INDEX

AGREE: MY NEED FOR PERSONAL SECURITY IS INCREASING (TOP 2 BOX)

LUXURY BUYERS

STATE OF LUXURY REAL ESTATE 2021 | 28

Trends for 2021 — Five Pillars

Self-Reliance

(CONTINUED)

Beyond the attitude of feeling more at risk, the Luxury Buyer is also more likely to have taken a greater interest in improving home security and controlling their physical environment. This is clearest with those responding “top interest” to these items, with Luxury Buyers at 32% for both compared to the Global Affluent at 21% and 25%, respectively. Luxury Buyers are somewhat more likely to have already taken these steps, however the difference is minimal (16% and 13% have already done this, respectively). This means there remains a great deal of interest in the subject, yet action has not yet taken place. Implications: High scores on the Self-Reliance index relate to interest in the following next-home features and amenities. Neighborhood

Residence Rooms for live-in help

Shopping centers nearby

Great internet connection Game room

Global Affluent in Total | How interested are you in… Improving Home Security

14%

Having Control Over Your Physical Environment

10% 7%

10% 21%

21%

18%

25%

33%

41%

g NOT AT ALL INTERESTED g CURIOUS TO LEARN MORE g INTERESTED IN DOING THIS g THIS IS A TOP INTEREST FOR ME g HAVE ALREADY DONE THIS

STATE OF LUXURY REAL ESTATE 2021 | 29

Trends for 2021 — Five Pillars

Embracing Spontaneity Embracing Spontaneity is borne out of the global lockdowns and subsequent need to work, learn, live, and play at home. At its essence, the need for spontaneity is in response to the home having to take on new responsibilities in normal living. Consumers emphasize the importance of delightful surprise and having fun at home — that is to say, breaking out of the rut. From a lifestyle perspective, it is associated with passions for physical activity (playing sports, being outdoors), being well entertained (video games, streaming media), entertaining others at home, and aesthetics with art and luxury-living with both brands and experiences.

50 51 GLOBAL AFFLUENT

LUXURY BUYERS

37% 41% GLOBAL AFFLUENT

LUXURY BUYERS

71% 84% GLOBAL AFFLUENT

INDEX

EMBRACING SPONTANEITY

% AGREE: I DO NOT LIKE SURPRISES (TOP 2 BOX)

% AGREE: I WANT MORE FUN THINGS TO DO AT HOME

LUXURY BUYERS

STATE OF LUXURY REAL ESTATE 2021 | 30

Trends for 2021 — Five Pillars

Embracing Spontaneity Implications: High scores on the Embracing Spontaneity index relate to interest in the following next-home features and amenities. Developers take note that consumers crave the best of both worlds: bucolic settings with modern convenience nearby. Clearly athome entertainment is among the top interests for this consumer as well as new construction in modern neighborhoods. Neighborhood Suburban/town

Nature setting

Newly developed

Residence Game room Home theatre Security system Bathtub, hot tub or spa Single family home New construction

STATE OF LUXURY REAL ESTATE 2021 | 31

Trends for 2021 — Five Pillars

Financial Confidence The lockdowns that were intended to limit the spread of COVID-19 also caused significant economic disruption throughout the world. However, in most cases, it was the working- and middle-class consumer who suffered most from these restrictions. Indeed, the affluent and wealthy classes saw an increase in their overall financial wellbeing. For example, in the United States, household wealth declined by about USD $7 trillion in March.2 Since then, equity prices have risen dramatically. As of Q3 2020 the trend in asset growth is back on track — $140 trillion in total household wealth, compared to $135 trillion at the end of 2019. Putting this figure into perspective, total worldwide personal wealth at the end of 2019 was estimated3 to be USD $399 trillion, 43% of which was held by the 52 million USD millionaires of the world. The Global Affluent are confident about their household financial strength right now. Household Financial Confidence is a key indicator in consumers’ willingness to spend money on luxury categories and bodes well for further investment and purchasing behaviors by the affluent class at large. Risk is on the other side of the coin when it comes to investment gain and the Luxury Buyer is aware of this — fully two-thirds (67%) agree that long-term financial security garners at least some concern. The risk is not just financial but has implications for their lifestyle and overall wellbeing.

61 57 GLOBAL AFFLUENT

FINANCIAL CONFIDENCE

LUXURY BUYERS

72% 82% GLOBAL AFFLUENT

INDEX

VERY CONFIDENT IN HOUSEHOLD FINANCIAL STRENGTH (TOP 3 BOX)

LUXURY BUYERS

50% 67%

AGREE: I AM CONCERNED ABOUT MY LONG-TERM ECONOMIC SECURITY (TOP 2 BOX)

U.S. Federal Reserve, Household Net Worth |

Credit Suisse Global Wealth Report 2020

GLOBAL AFFLUENT

LUXURY BUYERS

STATE OF LUXURY REAL ESTATE 2021 | 32

Trends for 2021 — Five Pillars

Financial Confidence

(CONTINUED)

Financial strategy plays a central role in many affluent households, with nearly all seeking ways to reduce their tax burdens. For some this is careful planning with a professional; for others it is about shifting their base of operation to more tax-friendly nations (see the trend Freedom of Movement). The Luxury Buyer is different from the average Global Affluent consumer in their interest in retiring early from work. Sixtyfour percent express more than simply curious to learn more, while 30% say it is a top interest and just 11% are not interested in it at all. Implications: The Financial Confidence index is a predictor of overall consumption but the home falls outside that definition. High scores on the Financial Confidence index relates making more additional purchases for the home, as well as interest in the following features and amenities. Neighborhood

Quiet spaces for each family member

Gated community

On-property guest house

New development

Reducing Tax Burden

11% 4%

Retiring Early From Work

13%

16%

33%

17% 17%

26% 36%

27%

Residence

Short commute to work/office building

Shared amenities for the neighborhood (e.g., pool, clubhouse, playgrounds)

Global Affluent in Total | How interested are you in…

Self-sufficient (can stay at home for longer periods of time)

g NOT AT ALL INTERESTED g CURIOUS TO LEARN MORE g INTERESTED IN DOING THIS g THIS IS A TOP INTEREST FOR ME g HAVE ALREADY DONE THIS

STATE OF LUXURY REAL ESTATE 2021 | 33

SUMMIT, NEW JERSEY, USA | $4,100,000

MARKET UPDATE LUXURY REAL ESTATE

STATE OF LUXURY REAL ESTATE 2021 | 34

Market Update

Overall Interest in Buying a Residence: White Hot Global Affluent consumer interest in real estate is at remarkably high levels relative to other surveys conducted by Luxury Portfolio International® in recent years. It is worth noting that in previous studies, market interest data have been stable over the past 4–5 years and that trend is expected to continue. The expansion of buyer interest is thought to be a circumstance-driven boost in demand contributed to by COVID-19 lockdowns, delays in the purchase process, and the desire for alternative investments to financial instruments. The “bump” of buyers in the near term (now through 2021) that tapers off for 2022 and 2023 should not be interpreted as lower demand in the future. Instead, this data represents an early sign of future demand which could grow (or shrink) substantially as the time comes. Number of Affluent Households in the Market to Buy (in 1,000s) 15.51 Million Over Next 3 Years 7,388 NOW THROUGH 2021

5,074 2022

3,043 2023

Number of Affluent Households in the Market to Sell (In 1,000s) 10.28 Million Over Next 3 Years 3,331

When are you considering each of the following residential real estate market activities, if at all?

Purchase A RESIDENCE OR BUILDABLE LOT

Sell A RESIDENCE OR BUILDABLE LOT

24%

11%

17%

13%

10%

2024

12%

13%

Not At This Time

37%

53%

Next 3 Years (NET)

51%

34%

2021 2022

2023

An imbalance in buyers and sellers means that sellers are likely in the driver’s seat for most sales.

NOW THROUGH 2021

3,970 2022

2,974 2023

An imbalance in buyers and sellers means that sellers are likely in the driver’s seat for most sales.

STATE OF LUXURY REAL ESTATE 2021 | 35

Market Update

Overall Interest in Buying a Residence: White Hot

(CONTINUED)

Near Term Crunch Global Affluent Buyers so outstrip sellers that just 5% are looking to deal in real estate in the coming year (that is, both buy and sell). The majority of the Global Affluent in the market are buyers exclusively, not looking to sell a property they currently own. This acquisition mode is a main driver in near term demand. At the same time, just 6% are looking to sell exclusively, meaning that nearly half of sellers also expect to be making a purchase this year.

Total in the Market to Buy:

Total in the Market to Sell:

NOW TO END OF 2021

24%

11%

BUY/NOT SELL

19%

SELL/NOT BUY

Implications: The lopsided nature of buyers and sellers in the market right now will contribute to demand for new property and higher prices for existing residences. What is also likely to happen is that buyers will place bids on multiple properties to hedge against the disappointment of losing a home from a bidding war.

BUY AND SELL

STATE OF LUXURY REAL ESTATE 2021 | 36

Market Update

Price Range Consideration Two-thirds (66%) of the Global Affluent in the market to buy are seeking luxury residences, bringing the global Luxury Buyer market to 10.30 million households worldwide. The bulk of buyers (52%) are targeting a residence between USD $1M to $4.9M price range. The average price for Luxury Buyers globally is USD $3.6M with half of buyers spending USD $2.25M or more. AMONG THOSE IN THE MARKET TO BUY IN THE NEXT 3 YEARS | In what price range are you considering for your next residence? Use your best estimate for the home itself, not including furniture, décor, renovations or moving expenses. GLOBAL LUXURY AFFLUENT BUYERS

ALL OTHER USD $250K+

UNDER USD $1M

34%

100%

USD $1M–$1.9M

26% 39% 0%

USD $2M–$2.9M

15% 23%

USD $3M–$4.9M

11% 17%

USD $5M–$9.9M

10%

15%

USD $10M or more

AVERAGE

$2.62

$3.63

$0.63

(USD MILLIONS)

MEDIAN

(50% ABOVE/BELOW)

GLOBAL LUXURY BUYER MARKET

10.30 million HOUSEHOLDS WORLDWIDE SEEKING A RESIDENCE VALUED AT USD $1 MILLION OR MORE

Household estimate is based on the total affluent households multiplied by the proportion in the market to buy in the next 3 years at USD $1 million or more. The figure represents the countries surveyed. Note this number is coincidentally very close to the number in the market to sell their residence (10.28 million)

$1.75 $2.25 $0.65

STATE OF LUXURY REAL ESTATE 2021 | 37

Market Update

Price Range Consideration

(CONTINUED)

The overall budget for the purchase is much greater than the property itself, with nearly all Luxury Buyers (96%) expecting to make additional purchases as part of the new-home acquisition. Common elements such as furniture, appliances, electronics, and décor top the likely purchase list. However, as next-home value increases, so too does the number of categories being purchased. High ($5M) and Ultra-Luxury ($10M) buyers are keen to outfit their home gym or other recreational activity, such as buy a new car, new clothes and new art for the home. AMONG THOSE IN THE MARKET TO BUY IN THE NEXT 3 YEARS | Beyond the home budget you just mentioned, which of the following, if any, will you buy specifically to go along with your home purchase?

LUXURY BUYERS

USD $1M–$4.9M

USD $5M–$9.9M

USD $10M+

Furniture

63%

61%

74%

Appliances

58%

59%

55%

62%

Electronics

57%

56%

62%

63%

Décor

51%

48%

59%

61%

Home gym equipment

43%

40%

52%

45%

Automobile

38%

36%

44%

55%

Apparel and accessories

38%

34%

54%

52%

Art for display

37%

34%

45%

50%

Recreational equipment

33%

30%

42%

37%

(e.g., bicycle, golf clubs, skis)

STATE OF LUXURY REAL ESTATE 2021 | 38

Market Update

Great Expectations Affluent consumers around the world share mixed opinions on the luxury residential market — nearly equal amounts believe it is getting stronger and getting softer. But the perspective changes when looking at Luxury Buyers — especially as their price range increases. Nearly half of global Luxury Buyers (45%) believe the market is getting stronger compared to 31% who believe it is getting softer. These ratios tend to hold until the Ultra-Luxury tier, with buyers at USD $10 million or more see the market of buyers growing much more than shrinking (48% versus 17%, respectively). And as the market intensity rises, so too do home value expectations. Nearly one-third of Luxury Buyers (29%) believe their current home will appreciate in value by more than 10% in the next 12 months — and about half (52%) of Ultra-Luxury Buyers think the same of their current property.( Which of the following statements best describes your point of view on the luxury residential real estate market? GLOBAL AFFLUENT

LUXURY BUYERS

ALL OTHERS USD $250K+

UNDER USD $1M

USD $1M–$4.9

USD $5M–$9.9

USD $10M+

Getting stronger (more buyers than sellers)

36%

45%

31%

37%

44%

46%

48%

Getting softer (more sellers than buyers)

28%

31%

27%

31%

32%

29%

17%

Not changing very much

25%

21%

27%

26%

20%

24%

27%

I do not know about this market

11%

15%

NET: % Stronger — % Softer

+14

+12

+17

+31

STATE OF LUXURY REAL ESTATE 2021 | 39

Market Update

Great Expectations

(CONTINUED)

AMONG CURRENT OWNERS | What do you think will happen to the value of your home over the next 12 months? GLOBAL AFFLUENT

LUXURY BUYERS

ALL OTHERS USD $250K+

UNDER USD $1M

USD $1M–$4.9

USD $5M–$9.9

USD $10M+

Increase significantly (up more than 10%)

17%

29%

11%

13%

27%

28%

52%

Increase somewhat (up by 1% to 10%)

43%

36%

47%

48%

37%

14%

Little or no change (0% to 1% up or down)

24%

20%

27%

24%

21%

18%

Decrease somewhat (down by 1% to 10%)

12%

10%

11%

Decrease significantly (down more than 10%)

Not sure 4%

Implications: Consumer expectation is that the long-standing seller’s market will not only continue but intensify as time goes by. The effect is two-fold: buyers and sellers will want to take advantage of a hot market; the best scenario for all involved. Conversely, the rapidly evolving market can be a reason to hesitate to list for sale as local prices may outpace seller’s ability to rebuy. If competition for suitable properties remains high then prices are likely to grow rapidly, potentially pricing out a recent seller. Ultra-Luxury Buyers are feeling competition for the properties they consider. This might signal a lack of quality inventory, but more likely, they are aware of others who are also in the market and experiencing multiple-bid scenarios.

STATE OF LUXURY REAL ESTATE 2021 | 40

Market Update

Investment Properties Make up a Sizable Portion of the Luxury Market

Implications: Most buyers are in a traditional purchase cycle, looking for a home for personal use. With recent instability and, at times, irrational exuberance in financial markets around the world, affluent consumers are seeking diversity with alternatives to traditional financial investments.

One quarter of global consumers are seeking an investment or rental property for their purchase in the next three years, with little variation by price point. Regionally, Asia-Pacific buyers are the most interested in investment properties with less interest from Europe and North America. Ultra-Luxury Buyers are more likely than others to be interested in available land to build their next home. AMONG THOSE IN THE MARKET TO BUY IN THE NEXT 3 YEARS | Is the residence you plan to buy...? g PERSONAL USE (PRIMARY, SECOND OR VACATION RESIDENCE) g INVESTMENT OR RENTAL PROPERTY g LAND/BUILDABLE LOT + OTHER

24% 65%

11%

GLOBAL AFFLUENT

25% 64%

11%

LUXURY BUYERS

21% 66%

13%

ALL OTHERS USD $250K+

22% 65%

12%

UNDER USD $1M

25% 66%

24% 9%

USD $1M TO $4.9M

64%

13%

USD $5M TO $9.9M

27% 22% 51% USD $10M OR MORE

STATE OF LUXURY REAL ESTATE 2021 | 41

Market Update

New Construction in New Neighborhoods Global Luxury Buyers are equally split in their preference for established neighborhoods and new developments (47% vs. 40%) yet the single most in-demand property type is a new construction/new development. One fifth of buyers (20%) expect this combination in their next residence; this segment has a preference for Urban/City living (41%) and is also more likely to pick a resort/retirement community than other buyer types (16% vs. 10%). AMONG GLOBAL LUXURY BUYERS | Age of Home by Neighborhood Type g MORE THAN 5 YEARS OLD

g BUILT IN PAST 1–5 YEARS

47% 16% 15% 16%

g NEW CONSTRUCTION

40% 7% 13%

[ 20% ]

ESTABLISHED NEIGHBORHOOD

NEWLY DEVELOPED NEIGHBORHOOD

(E.G., MATURE TREES, OLDER HOMES, FEW OPEN LOTS)

(E.G., ALL HOMES RECENTLY BUILT, OPEN LOTS AVAILABLE)

10% 3% NOT IN A NEIGHBORHOOD; PRIVATE LAND

NOT SURE

STATE OF LUXURY REAL ESTATE 2021 | 42

Market Update

New Construction in New Neighborhoods

Implications:

(CONTINUED)

Buyers in newly established neighborhoods have a greater budget than those seeking established areas in which to live, even if the residence itself is not new construction. The New/New Luxury Buyer has an average next-home budget of USD $4.1 million, which is 15% higher than a Luxury Buyer seeking a new build in an established neighborhood (USD $3.5 million). Even those interested in existing homes in new neighborhoods have a higher budget on average (USD $3.7 million). AMONG LUXURY BUYERS | Next-Home Budget (USD millions) by Building Age/Neighborhood Age $4.5M $4M $3.5M $3M $2.5M $2M $1.5M $1M $.5M

$4.1

$3.7

$3.5

$3.2

$3.0

NEW/NEW

PAST 5 YEARS/NEW

NEW/ESTABLISHED

PAST 5 YEARS/ESTABLISHED

5+ YEARS OLD/ESTABLISHED

Luxury Buyers place a premium on the full package of their next residence — and in this case a newly developed neighborhood is worth about 15% more than an established one. Key features for new development seekers are nearby shopping centers, medical facilities, privacy, parks and recreation, and schools. Shared neighborhood amenities (e.g., a pool, clubhouse, playgrounds) are also in demand, particularly among parents with younger children.

STATE OF LUXURY REAL ESTATE 2021 | 43

Market Update

Make Room for the Pod

Implications:

New Zealand has been recognized as a leader in containing the spread of COVID-19. Part of this success is attributable to its policy of “lockdown bubbles” where people would come together in particular to support those who do not live in a traditional nuclear family. As COVID-19 case numbers began to fall, every New Zealander was given the opportunity to live in a multi-household bubble, extending their bubble to incorporate isolated people, caregivers, family, close friends, supporters, and other loved ones.4 Public health experts have hailed “quarantine pods” or “quaranteams” as an effective way to get our human needs met without unnecessarily endangering ourselves or others. Six-in-ten Luxury Buyers are looking for features that can accommodate an outside group of people to stay at the residence, be it a guest house, a dual-key property, or rooms for live-in help. This contrasts with non-Luxury Buyers, of which just 35% see similar types of interest in these features. There is very little difference in demand by region, indicating this is a luxury lifestyle trend more so than a cultural expectation. What features are you looking for in your future home? ON-PROPERTY GUEST HOUSE

32% LUXURY BUYERS 4

17% ALL OTHER BUYERS

DUAL-KEY RESIDENCE

26% LUXURY BUYERS

15% ALL OTHER BUYERS

ROOMS FOR LIVE-IN HELP

25% LUXURY BUYERS

NET (% SELECTED 1+ ITEMS)

35% 14% ALL OTHER BUYERS

58% LUXURY BUYERS

Whether a cultural norm, a COVID-19 containment measure, or a simple lifestyle choice, most Luxury Buyers are interested in some form of extra space on the property to house their guests. By its very nature, this trend prioritizes larger-sized properties and lots. Combine this with previous research that younger Luxury Buyers, the “New Aristocracy,” are seeking larger homes than before and it could be a boon for estates and larger homes that have been slow to sell in recent years.

ALL OTHER BUYERS

Long, Nicholas J. et al (2020) Living in bubbles during the COVID-19 pandemic: insights from New Zealand. Rapid Research Report. London School of Economics and Political Science, London, UK.

STATE OF LUXURY REAL ESTATE 2021 | 44

CANGGU, INDONESIA | RP37,000,000,000

ASIA PACIFIC LUXURY BUYER TRENDS

STATE OF LUXURY REAL ESTATE 2021 | 45

Asia Pacific

The Five Pillars Among Luxury Buyers Asia-Pacific Luxury Buyers rank higher than the average Global Affluent consumer on Self-Reliance, Work, Live, and Play at Home, and Freedom of Movement as consumer trends. T he Work, Live, and Play at Home Index for Luxury Buyers in Asia Pacific is heavily influenced by the ability to work and live almost anywhere in the world. This trend is expected to continue, and particularly for those in India — nearly all plan to spend more time working from home in 2021. Luxury Buyers high on the index enjoy cerebral activities such as philosophy, participating in auctions, antiques, horses and other family-oriented pursuits. any Luxury Buyers across Asia Pacific rate highly on the Self-Reliance Index, indicating the importance of M personal and home security for these buyers. This mostly urban-dwelling consumer is highly interested in properties that prioritize security, technology integration for sustainability and smart home apps. Private land for new builds or gated communities are also in higher demand. reedom of Movement prioritizes the interest in having a second passport and again Luxury Buyers in India F and China are leading Asia Pacific. All other Luxury Buyers in Asia Pacific are less concerned with the ability to own property elsewhere but it is worth noting that while relatively low, their interest is higher than the global average. This buyer values refined living with concierge or valet services, golf, co-working spaces, and an airport nearby. Open to a wide range of home possibilities, high-scoring Luxury Buyers seek penthouse apartments for their next residence. Other features of luxury living appear with interests in horses, sailing/yachting, auctions, art, and antiques.

STATE OF LUXURY REAL ESTATE 2021 | 46

Asia Pacific

The Five Pillars Among Luxury Buyers

(CONTINUED)

he emerging trend of 2021, Embracing Spontaneity is felt most powerfully with Luxury Buyers in China where T surprise and delight are in high demand. This consumer enjoys automobiles, financial investing, being outdoors and sports. They find hotel or resort residences intriguing, but as a group they are more likely to end up in a single-family home, in a nature setting. The Financial Confidence Index is strongest in East Asia (Japan, South Korea and Taiwan) as Luxury Buyers there express low concern for their financial future and are making careful plans for the future regarding taxes and retirement. In contrast to this, Luxury Buyers from India and China appear to be “living in the moment” with strong confidence with their current situation and more concern for long-term economic security. The Chinese put less emphasis on reducing taxes than do their East Asian counterparts. Higher ratings on Financial Confidence tend to describe a well-read consumer with a taste for gourmet food and beverage.

STATE OF LUXURY REAL ESTATE 2021 | 47

Asia Pacific

The Five Pillars Among Luxury Buyers g GLOBAL AFFLUENT AVERAGE

WORK, LIVE, AND PLAY AT HOME

64 54

69 59 59

g APAC LUXURY BUYERS

g INDIA

FREEDOM OF MOVEMENT

64 52 39

(CONTINUED)

g CHINA

SELF-RELIANCE

66 69 57

g EAST ASIA (EX CHINA)

g SE ASIA + OCEANIA

EMBRACING SPONTANEITY

67 66

45 46

50 50 47

FINANCIAL CONFIDENCE

61 50 49

61 57 54 58 56

East Asia includes Japan, South Korea, and Taiwan. Southeast Asia and Oceania includes Singapore, Indonesia, Australia, and New Zealand.

STATE OF LUXURY REAL ESTATE 2021 | 48

Asia Pacific

Market Demand and Pricing Asia-Pacific markets are the most active among those countries studied. As the wealth explosion continues across the continent, affluent consumers are flocking to the real estate market to turn financial gain into real assets. The affluent seller market is significantly lagging buyer demand, giving new developments an opportunity to capture additional business.

AMONG THOSE IN THE MARKET TO BUY IN THE NEXT 3 YEARS | Total Affluent from Asia Pacific g PURCHASE A RESIDENCE OR BUILDABLE LOT

g SELL A RESIDENCE OR BUILDABLE LOT

58% 51% 40% 30% When are you considering each of the following residential real estate market activities, if at all?

29% 18% 19% 11%

NOW–THE END OF 2021

10% 10% 2022

2023

13%

2024 OR LATER

NOT CONSIDERING AT THIS TIME

NEXT 3 YEARS (NET)

STATE OF LUXURY REAL ESTATE 2021 | 49

Asia Pacific

Market Demand and Pricing

(CONTINUED)

The majority of Asia-Pacific affluent in the market are looking at the USD $1 million dollar and above price point (79%), with a median price of USD $2.25 million and an average of USD $3.11 million. Within luxury buyers, half are buying among USD $2.75 million and 23% at USD $5 million or more. AMONG THOSE IN THE MARKET TO BUY IN THE NEXT 3 YEARS | Total Affluent from Asia-Pacific (CONTINUED) g ASIA-PACIFIC TOTAL AFFLUENT

g ASIA-PACIFIC LUXURY BUYERS AVERAGE

33% In what price range are you considering for your next residence? Use your best estimate for the home itself, not including furniture, décor, renovations or moving expenses.

26% 21%

$3.11

Million USD

26% 20% 15%

18%

13%

$3.76

16%

Million USD MEDIAN

6% 7%

$2.25

Million USD

0% UNDER USD $1M

USD $1M–$1.9M

USD $2M–$2.9M

USD $3M–$4.9M

USD $5M–$9.9M

USD $10M OR MORE

$2.75

Million USD

STATE OF LUXURY REAL ESTATE 2021 | 50

Asia Pacific

Market Demand and Pricing

(CONTINUED)

Luxury Buyers are not only a large segment of the affluent buyer population, but also make up 46% of the total Asia-Pacific affluent households. Total Number of Households in the Market to Buy in the Next 3 Years ESTIMATED AFFLUENT HOUSEHOLDS IN ASIA PACIFIC

12.70 million

AFFLUENT IN THE MARKET IN THE NEXT 3 YEARS

7.41 million

LUXURY BUYERS IN THE MARKET (USD $1 MILLION OR MORE)

5.85 million

STATE OF LUXURY REAL ESTATE 2021 | 51

Asia Pacific

Expectations for the Luxury Market: Buyers from Asia Pacific Across the region, Luxury Buyers are sensing a change in the luxury market, whether stronger or softer. Each sub-region is net-positive for “Stronger” except SE Asia and Oceania which draw even. While competition for home purchases may be getting more crowded, Luxury Buyers are expecting their current home to appreciate over the coming year. Luxury Buyers in India see the greatest uplift with more than half (56%) expecting their home value to rise by 10% or more. Indian and Chinese Luxury Buyers are predominantly seeking a residence for personal use with investment properties in a distant second. Not so for East and Southeast Asian Luxury Buyers who are much more interested in owning a value-generating asset.

g ASIA-PACIFIC LUXURY BUYERS Which of the following statements best describes your point of view on the luxury residential real estate market?

44%

53%

43% 42% 39%

g INDIA

32%

g CHINA

g EAST ASIA (EX CHINA)

40%

39%

38% 15%

24%

GETTING STRONGER

GETTING SOFTER

(MORE BUYERS THAN SELLERS)

(MORE SELLERS THAN BUYERS)

g SE ASIA + OCEANIA

29%

22%

7% NOT CHANGING VERY MUCH

2% 2% 2% 5% 0% I DO NOT KNOW ABOUT THIS MARKET

East Asia includes Japan, South Korea, and Taiwan. Southeast Asia and Oceania includes Singapore, Indonesia, Australia, and New Zealand.

STATE OF LUXURY REAL ESTATE 2021 | 52

Asia Pacific

Expectations for the Luxury Market: Buyers from Asia Pacific

(CONTINUED)

What do you think will happen to the value of your home over the next 12 months? g ASIA-PACIFIC LUXURY BUYERS

g INDIA

g CHINA

g EAST ASIA (EX CHINA)

g SE ASIA + OCEANIA

56% 39%

33%

32% 18%

24% 22%

45% 36%

18%

20%

18% 11%

INCREASE SIGNIFICANTLY (UP MORE THAN 10%)

17%

23% 11%

11% 10%

16%

INCREASE SOMEWHAT

LITTLE OR NO CHANGE

DECREASE SOMEWHAT

(UP BY 1% TO 10%)

(0% TO 1% UP OR DOWN)

(DOWN BY 1% TO 10%)

8% 9%

4% 3%

DECREASE SIGNIFICANTLY

1% 1%

0% 0%

NOT SURE

(DOWN MORE THAN 10%)

East Asia includes Japan, South Korea, and Taiwan. Southeast Asia and Oceania includes Singapore, Indonesia, Australia, and New Zealand.

STATE OF LUXURY REAL ESTATE 2021 | 53

Asia Pacific

Expectations for the Luxury Market: Buyers from Asia Pacific

(CONTINUED)

Is the residence you plan to buy...? g ASIA-PACIFIC LUXURY BUYERS

59%

66%

g INDIA

g CHINA

g EAST ASIA (EX CHINA)

g SE ASIA + OCEANIA

72% 50% 54%

44% 31%

PERSONAL USE

22%

37%

19%

INVESTMENT OR RENTAL PROPERTY

10%

13%

10%

LAND/BUILDABLE LOT + OTHER

(PRIMARY, SECOND OR VACATION RESIDENCE)

East Asia includes Japan, South Korea, and Taiwan. Southeast Asia and Oceania includes Singapore, Indonesia, Australia, and New Zealand.

STATE OF LUXURY REAL ESTATE 2021 | 54

COLLAROY, SYDNEY, AUSTRALIA | A$18,000,000

ASIA PACIFIC DETAILED TABLES

STATE OF LUXURY REAL ESTATE 2021 | 55

Asia Pacific — Detailed Tables

Asia-Pacific Luxury Buyer Profile: Demographics and Finances Age

Children in Household

Employment Status Employed, as a…

97%

$250K to $299K

20%

Under USD $1M

Business owner

31%

$300K to $499K

48%

USD $1M to $2.4M

$500K to $999K

31%

USD $2.5M to $4.9M 27%

Average age

38.0

18–29

15%

Under 18 years of age

74%

30–39

49%

18 years or older

14%

40–49

22%

50–59

12%

o children in N the household

60+

Marital Status Single, never married Married

ot a parent N of a child

8% 7%

xecutive in a E business you do not own anager of a M division or department

Household Income in USD

21%

$1M or more Average

Net Worth Excluding Primary Residence

1% $471,244

6% 27%

USD $5M to $9.9M

23%

USD $10M+

13%

49%

otal Wealth Including Primary Residence T Average: USD $8,300,975

89%

STATE OF LUXURY REAL ESTATE 2021 | 56

Asia Pacific — Detailed Tables

Asia-Pacific Luxury Buyer Profile: Passions and Luxury Lifestyle Which of the following activities or interests are real passions in your life, if any? Top 10

Luxury Categories Used Jewelry and watches

59%

Food and beverage

44%

Apparel and accessories

51%

Automotive

43%

57%

Travel and hospitality

51%

Real estate

42%

Family time

57%

Electronics

48%

Financial services

42%

62%

Fashion and style

57%

28%

Social media

55%

45%

Concierge healthcare

61%

Fragrance, beauty, and personal care Home furnishings

45%

Watching TV or movies

Sports

58%

68% 67%

News and current events

Traveling Shopping

63%

Automobiles Technology

Passions: Noteworthy Distinctions for APAC Luxury Buyers Versus Other Regions Reading

49%

Luxury brands and products

49%

Real estate

46%

5.0

Self-Described Purchase Habits: Luxury Products, Services, Experiences

Concerts/live music 41% Philosophy

Average number of luxury categories

23%

Rarely or never do this

13%

Frequently do this but not always

34%

Occasionally do this

41%

Do this all the time

11%

STATE OF LUXURY REAL ESTATE 2021 | 57

Asia Pacific — Detailed Tables

Neighborhood Characteristics in Total | Asia-Pacific Luxury Buyers Age of Neighborhood

Setting Urban/City

Established neighborhood (e.g., mature trees, older homes, Nature setting: Lake or river view + Secluded woodland + few open lots) 47% 49% Mountain or mountain view + Ocean + Desert + Rainforest 31% 18% Newly developed neighborhood Suburban/Town 13% 14% (e.g., all homes recently built, 44% open lots available) 40% Resort + Retirement community 11% 13% 39% 51%

Not in a neighborhood; private land 11% 6% Rural estate or homestead 6% 3%

1% Not sure 3% Other 0% 0%

g GLOBAL LUXURY BUYERS

g ASIA-PACIFIC LUXURY BUYERS

STATE OF LUXURY REAL ESTATE 2021 | 58

Asia Pacific — Detailed Tables

Neighborhood Characteristics in Total | Asia-Pacific Luxury Buyers

(CONTINUED)

Neighborhood Features and Amenities Shopping centers

48% 54%

Shared amenities for the neighborhood (e.g., pool, clubhouse, playgrounds)

Medical facilities

46% 50%

34% 41%

Parks and recreation

44% 48%

Cultural centers (e.g., museums, libraries, national monuments)

33% 38%

Lots of privacy

44% 42%

Short commute to work/office building

33% 37%

Walkable

40% 36%

Gated community

31% 33%

Restaurants and night life

40% 40%

Golf course

24% 21%

Schools

37% 37%

Airport

21% 21%

Bikeable

36% 35%

Co-working spaces

20% 22%

g GLOBAL LUXURY BUYERS

g ASIA-PACIFIC LUXURY BUYERS

STATE OF LUXURY REAL ESTATE 2021 | 59

Asia Pacific — Detailed Tables

Residence Characteristics in Total | Asia-Pacific Luxury Buyers Will your next residence be new, built in the past 5 years, or more than 5 years old?

What type of residence do you expect to buy?

New construction

Single-family home/landed residences (built on a single lot, no shared walls)

33% 26%

Condominium/Apartment (single unit within a larger building; shared walls)

15% 19%

Townhouse (a single-family home that shares a wall with another)

16% 18%

High-rise penthouse apartment (top floors in a large building)

17% 20%

Branded hotel or resort residence (with access to its amenities)

9% 11%

Furniture

63% 62%

Land without buildings

7% 5%

Appliances

58% 60%

Houseboat/yacht

1% 1%

Electronics

57% 60%

Décor

51% 52%

Home gym equipment

43% 45%

Automobile

38% 39%

g GLOBAL LUXURY BUYERS

g ASIA-PACIFIC LUXURY BUYERS

41% 42%

31% Built in past 1–5 years 31% More than 5 years old 27% 26%

Additional Purchases for Your Next Home Apparel and accessories

38% 39%

Art for display 37% 40% Recreational equipment (e.g., bicycle, golf clubs, skis)

33% 35%

STATE OF LUXURY REAL ESTATE 2021 | 60

Asia Pacific — Detailed Tables

Residence Characteristics in Total | Asia-Pacific Luxury Buyers

(CONTINUED)

What features or amenities are you looking for in your future home? Security system 61% 58% Chef’s kitchen 46% 46% Smart home technology (i.e., convenience)

59% 60%

46% Wellness amenities 44%

Bathtub, hot tub, or spa

52% 48%

Playroom or family room

Sustainability technology (i.e., better for environment)

52% 59%

Home theatre 40% 40%

Great internet connection 52% 50%

Game room 36% 32%

Swimming pool 49% 45%

On-property guest house

Outdoor living area

Wine cellar 30% 29%

47% 49%

Self-sufficient (can stay at home for longer periods of time) 47% 50% Home gym 47% 45%

32% 33%

Dual-key residence (i.e., two separated living spaces with shared entrance at one address)

Rooms for live-in help Quiet spaces for each family member 46% 48% Concierge or valet services Home office 46% 42% g GLOBAL LUXURY BUYERS

41% 43%

26% 28% 25% 25% 25% 24%

g ASIA-PACIFIC LUXURY BUYERS

STATE OF LUXURY REAL ESTATE 2021 | 61

Asia Pacific — Detailed Tables

Neighborhood Characteristics by Price Point | Asia-Pacific Luxury Buyers Age of Neighborhood

Setting Urban/City

Established neighborhood (e.g., mature trees, older homes, few open lots) 18% 19% Newly developed neighborhood 17% 6% (e.g., all homes recently built, open lots available) 13% 16%

49% 57%

Nature setting: Lake or river view + Secluded woodland + Mountain or mountain view + Ocean + Desert + Rainforest Suburban/Town Resort + Retirement community Rural estate or homestead

Not in a neighborhood; private land 4% 3%

Other

g USD $1M TO $4.9M

Not sure

53% 34%

39% 58% 7% 5% 1%

g USD $5M OR MORE

STATE OF LUXURY REAL ESTATE 2021 | 62

Asia Pacific — Detailed Tables

Neighborhood Characteristics by Price Point | Asia-Pacific Luxury Buyers

(CONTINUED)

Neighborhood Features and Amenities Shopping centers

53% 58%

Medical facilities

50% 50%

Parks and recreation

48% 50%

Lots of privacy

41% 44%

Walkable

35% 40%

Restaurants and night life

40% 37%

Schools

36% 40%

Bikeable

36% 31%

g USD $1M TO $4.9M

Shared amenities for the neighborhood (e.g., pool, clubhouse, playgrounds)

41% 43%

Cultural centers (e.g., museums, libraries, national monuments)

37% 41%

Short commute to work/office building

37% 36%

Gated community

30% 41%

Golf course

20% 26%

Airport

21% 21%

Co-working spaces

21% 28%

g USD $5M OR MORE

STATE OF LUXURY REAL ESTATE 2021 | 63

Asia Pacific — Detailed Tables

Residence Characteristics by Price Point | Asia-Pacific Luxury Buyers Will your next residence be new, built in the past 5 years, or more than 5 years old?

What type of residence do you expect to buy? Single-family home/landed residences (built on a single lot, no shared walls)

26% 25%

New construction

Condominium/Apartment (single unit within a larger building; shared walls)

19% 18%

Townhouse (a single-family home that shares a wall with another)

18% 17%

High-rise penthouse apartment (top floors in a large building)

21% 18%

Additional Purchases for Your Next Home

Branded hotel or resort residence (with access to its amenities)

10% 14%

Furniture

62% 64%

25% Built in past 1–5 years 33% More than 5 years old 26% 26%

Land without buildings

4% 7%

Appliances

58% 64%

Houseboat/yacht

1% 1%

Décor

49% 63%

Electronics

57% 69%

Home gym equipment

43% 52%

Automobile

35% 52%

g USD $1M TO $4.9M

g USD $5M OR MORE

41% 49%

Apparel and accessories

34% 58%

Art for display 37% 51% Recreational equipment (e.g., bicycle, golf clubs, skis)

33% 44%

STATE OF LUXURY REAL ESTATE 2021 | 64

Asia Pacific — Detailed Tables

Residence Characteristics by Price Point | Asia-Pacific Luxury Buyers

(CONTINUED)

What features or amenities are you looking for in your future home? Sustainability technology (i.e., better for environment) 59% 57%

Home gym

43% 50%

Smart home technology (i.e., convenience) 59% 63%

Swimming pool

43% 50%

Security system

57% 60%

Playroom or family room

41% 47%

Great internet connection

49% 54%

Home theatre

40% 39%

Home office

40% 49%

On-property guest house

32% 36%

Game room

29% 45%

Wine cellar

27% 33% 26% 35%

Self-sufficient (can stay at home for longer periods of time)

49% 53%

Quiet spaces for each family member

48% 47%

Outdoor living area

48% 52%

Chef’s kitchen

47% 44%

Wellness amenities

44% 51%

Dual-key residence (i.e., two separated living spaces with shared entrance at one address)

Bathtub, hot tub, or spa

44% 61%

Concierge or valet services

22% 33%

Rooms for live-in help

22% 38%

g USD $1M TO $4.9M

g USD $5M OR MORE

STATE OF LUXURY REAL ESTATE 2021 | 65

Asia Pacific — Detailed Tables

Neighborhood Characteristics by Country | Asia-Pacific Luxury Buyers Setting

Age of Neighborhood

Urban/City

59% 40% 54% 45%

Nature setting: Lake or river view + Secluded woodland + Mountain or mountain view + Ocean + Desert + Rainforest 18% 27% 13% 18%

Established neighborhood (e.g., mature trees, older homes, few open lots)

58% 22% 46% 54%

Newly developed neighborhood (e.g., all homes recently built, open lots available) 38% 67% 45% 37% Resort + Retirement community 7% 19% 15% 15% Suburban/Town 10% 8% 16% 20%

Not in a neighborhood; Rural estate or homestead 5% 6% 3% 2% private land 4% 12% 4% 8% Other 0% 0% 0% 0% Not sure 0% 0% 4% 1%

g INDIA

g CHINA

g EAST ASIA (EX CHINA)

g SE ASIA + OCEANIA

STATE OF LUXURY REAL ESTATE 2021 | 66

Asia Pacific — Detailed Tables

Neighborhood Characteristics by Country | Asia-Pacific Luxury Buyers

(CONTINUED)

Neighborhood Features and Amenities Shopping centers 31% 50% 74% 64% Walkable

26% 27% 42% 46%

Medical facilities

39% 43% 71% 47%

Gated community

20% 21% 48% 39%

Lots of privacy

31% 31% 45% 56%

Bikeable

37% 19% 39% 38%

Parks and recreation

26% 35% 68% 61%

Short commute to work/office building

24% 31% 50% 42%

Schools

40% 24% 41% 38%

Golf course

23% 25% 23% 17%

Shared amenities for the neighborhood (e.g., pool, clubhouse, playgrounds)

28% 33% 62% 42%

Airport

31% 14% 17% 17%

Restaurants and night life

33% 41% 47% 40%

Co-working spaces

27% 22% 20% 19%

Cultural centers (e.g., museums, libraries, national monuments)

35% 35% 52% 32%

g INDIA

g CHINA

g EAST ASIA (EX CHINA)

g SE ASIA + OCEANIA

STATE OF LUXURY REAL ESTATE 2021 | 67

Asia Pacific — Detailed Tables

Residence Characteristics by Country | Asia-Pacific Luxury Buyers What type of residence do you expect to buy? Single-family home/landed residences (built on a single lot, no shared walls) 21% 17% 31% 32% Condominium/Apartment (single unit within a larger building; shared walls) 19% 18% 17% 20% Townhouse (a single-family home that shares a wall with another) 15% 26% 13% 19% High-rise penthouse apartment (top floors in a large building) 15% 21% 22% 23% Branded hotel or resort residence (with access to its amenities) 20% 12% 10% 3% Land without buildings 6% 2% 7% 2% Houseboat/yacht 3% 0% 0% 1%

g INDIA

g CHINA

g EAST ASIA (EX CHINA)

g SE ASIA + OCEANIA

STATE OF LUXURY REAL ESTATE 2021 | 68

Asia Pacific — Detailed Tables

Residence Characteristics by Country | Asia-Pacific Luxury Buyers

(CONTINUED)

Will your next residence be new, built in the past 5 years, or more than 5 years old?

Additional Purchases for Your Next Home

New construction

25%

62% 60% 37%

Furniture 52% 44% 80% 68%

Built in past 1–5 years

35%

23% 33% 30%

Appliances 42% 51% 87% 61%

More than 5 years old

41%

16% 7%

Electronics 51% 48% 77% 62%

33%

Décor 35% 54% 65% 57% Home gym equipment

39% 41% 48% 51%

Automobile 39% 35% 42% 38% Apparel and accessories

41% 44% 46% 30%

Art for display 44% 39% 42% 35% Recreational equipment (e.g., bicycle, golf clubs, skis)

g INDIA

g CHINA

g EAST ASIA (EX CHINA)

39% 38% 41% 27%

g SE ASIA + OCEANIA

STATE OF LUXURY REAL ESTATE 2021 | 69

Asia Pacific — Detailed Tables

Residence Characteristics by Country | Asia-Pacific Luxury Buyers

(CONTINUED)

What features or amenities are you looking for in your future home? Security system

44% 54% 73% 61%

Home office

40% 38% 44% 43%

Smart home technology (i.e., convenience)

45% 47% 74% 71%

Chef’s kitchen

35% 28% 66% 51%

Bathtub, hot tub, or spa

32% 45% 68% 50%

Wellness amenities

40% 45% 47% 50%

Sustainability technology (i.e., better for environment)

52% 53% 64% 64%

Playroom or family room

38% 29% 45% 52%

Great internet connection

27% 41% 81% 55%

Home theatre

30% 41% 58% 35%

Swimming pool

45% 31% 40% 53%

Game room

29% 28% 42% 30%

Outdoor living area

42% 39% 54% 55%

On-property guest house

32% 23% 56% 21%

Self-sufficient (can stay at home for longer periods of time)

Wine cellar

31% 18% 39% 24%

45% 39% 53% 58%

Home gym

35% 50% 49% 49%

Dual-key residence (i.e., two separated living spaces with shared entrance at one address)

30% 19% 37% 23%

Quiet spaces for each family member

26% 40% 64% 61%

Rooms for live-in help

26% 26% 20% 29%

Concierge or valet services

26% 27% 29% 18%

g INDIA

g CHINA

g EAST ASIA (EX CHINA)

g SE ASIA + OCEANIA

STATE OF LUXURY REAL ESTATE 2021 | 70

MANHATTAN BEACH, CA, USA | $8,399,000

NORTH AMERICA LUXURY BUYER TRENDS

STATE OF LUXURY REAL ESTATE 2021 | 71

North America

The Five Pillars Among Luxury Buyers North American Luxury Buyers rank higher than the average Global Affluent consumer on Freedom of Movement, with Mexico the highest-scoring country in the study. Beyond the international nature of the trend, North American Luxury Buyers are interested in walkable/bikeable neighborhoods that give them access to schools, shopping, medical services, and recreation. Resort/retirement communities and concierge or valet services are of particular interest. Similarly, Mexican Luxury Buyers prioritize Self-Reliance as they seek improved security and control over their physical environment. In terms of the home, North American Luxury Buyers’ number one feature/amenity is a security system and about half are looking for the ability to spend long periods of time at home (self-sufficiency). A home theatre and access to restaurant delivery rounds out modern living at home. Work, Live, and Play at Home is a leading trend among Luxury Buyers in North America. Interest shared neighborhood amenities such as a pool, clubhouse or playground, a home office, smart home technology and fast internet suggest this buyer is expecting to be at home for the long haul. Luxury Buyers high on this trend are looking for established neighborhoods and homes they can stay at for long periods of time. Along with this, Embracing Spontaneity is the stress-release valve. Some are turning to retail therapy, others to diversions with social media and celebrity news, or the home theatre room for video games and movies. The Financial Confidence Index is higher among non-Luxury Buyers, reflecting an older demographic that is more likely to have already achieved early retirement and taken steps to reduce their tax burden. Overall, Luxury Buyers in North America are extremely confident in their household economy and view real estate as a solid ‘buy’ investment. They are interested in gourmet food and beverage, especially those prepared at a fine restaurant. Sailing/yachting is an interest for many. Reading and staying up-to-date on news and events also resonate with this buyer. For the home, outdoor living areas and quiet spaces for each family member rise in priority.

STATE OF LUXURY REAL ESTATE 2021 | 72

North America

The Five Pillars Among Luxury Buyers g GLOBAL AFFLUENT AVERAGE

WORK, LIVE, AND PLAY AT HOME

g NORTH AMERICA LUXURY BUYERS

FREEDOM OF MOVEMENT

(CONTINUED)

g MEXICO

SELF-RELIANCE

67 58

51 39

57 60 46

g UNITED STATES AND CANADA

EMBRACING SPONTANEITY

50 53

FINANCIAL CONFIDENCE

61 58

STATE OF LUXURY REAL ESTATE 2021 | 73

North America

Market Demand and Pricing The affluent market in North America is poised for continued growth through 2021 and over the next three years. The overall takeaway from the study is that onein-four affluent consumers in North America (25%) are in the market to buy luxury real estate over the next 3 years. As observed with affluent from other regions, there are many more buyers than sellers which may cause prices to rise.

AMONG THOSE IN THE MARKET TO BUY IN THE NEXT 3 YEARS | Total Affluent from North America g PURCHASE A RESIDENCE OR BUILDABLE LOT

g SELL A RESIDENCE OR BUILDABLE LOT

54% 44%

When are you considering each of the following residential real estate market activities, if at all?

45% 29%

21% 11%

NOW–THE END OF 2021

15%

2022

9% 10% 2023

11%

17%

2024 OR LATER

NOT CONSIDERING AT THIS TIME

NEXT 3 YEARS (NET)

STATE OF LUXURY REAL ESTATE 2021 | 74

North America

Market Demand and Pricing

(CONTINUED)

About half of the North America affluent in the market are house hunting at the million dollar and above price point (55%), with a median price of USD $1.25 million and an average of USD $2.17 million. Luxury Buyers concentrate between USD $1 million and USD $1.49 million, but with nearly one-in-five (19%) at the USD $5 million and above price point. For Luxury Buyers, the median budget is USD $2.25 million with an average of USD $3.45 million. AMONG THOSE IN THE MARKET TO BUY IN THE NEXT 3 YEARS | Total Affluent from North America (CONTINUED) g NORTH AMERICA TOTAL AFFLUENT BUYERS

g NORTH AMERICA LUXURY BUYERS AVERAGE

45%

$2.17

44%

In what price range are you considering for your next residence? Use your best estimate for the home itself, not including furniture, décor, renovations or moving expenses.

Million USD

$3.45

24%

Million USD

21% 11%

17% 9%

0% UNDER USD $1M

USD $1M–$1.9M

USD $2M–$2.9M

USD $3M–$4.9M

MEDIAN

12%

USD $5M–$9.9M

$1.25

Million USD

USD $10M OR MORE

$2.25

Million USD

STATE OF LUXURY REAL ESTATE 2021 | 75

North America

Market Demand and Pricing

(CONTINUED)

Luxury Buyers from North America represent 2.7 million households in the market over the next 3 years. This equals one-quarter of all affluent households in North America. Total Number of Households in the Market to Buy in the Next 3 Years

ESTIMATED AFFLUENT HOUSEHOLDS IN NORTH AMERICA

10.94 million

AFFLUENT IN THE MARKET IN THE NEXT 3 YEARS

4.89 million

LUXURY BUYERS IN THE MARKET (USD $1 MILLION OR MORE)

2.70 million

STATE OF LUXURY REAL ESTATE 2021 | 76

North America

Expectations for the Luxury Market: Buyers from North America At a regional level, North American Luxury Buyers see more buyers than sellers presently, and as a result the expectation is that home values will rise over the coming year. Prepared buyers may act quickly once a suitable property is identified. Luxury Buyers in Mexico have a very bullish outlook on the country’s real estate prospects. Mexico house prices have been growing over the past three years and appear poised to do so at the luxury level. Most planned real estate purchases have personal use in mind, with a smaller segment buying for strictly investment purposes.

g NORTH AMERICA LUXURY BUYERS

g MEXICO

g UNITED STATES AND CANADA

62% Which of the following statements best describes your point of view on the luxury residential real estate market?

46%

42%

37%

34% 19%

18% 19% 18% 2%

GETTING STRONGER

GETTING SOFTER

(MORE BUYERS THAN SELLERS)

(MORE SELLERS THAN BUYERS)

NOT CHANGING VERY MUCH

I DO NOT KNOW ABOUT THIS MARKET

STATE OF LUXURY REAL ESTATE 2021 | 7 7

North America

Expectations for the Luxury Market: Buyers from North America

(CONTINUED)

What do you think will happen to the value of your home over the next 12 months? g NORTH AMERICA LUXURY BUYERS

40%

g MEXICO

g UNITED STATES AND CANADA

42%

39% 29%

25%

29%

26%

21% 13% 7%

10%

6% 2%

INCREASE SIGNIFICANTLY (UP MORE THAN 10%)

INCREASE SOMEWHAT

LITTLE OR NO CHANGE

DECREASE SOMEWHAT

(UP BY 1% TO 10%)

(0% TO 1% UP OR DOWN)

(DOWN BY 1% TO 10%)

DECREASE SIGNIFICANTLY

NOT SURE

(DOWN MORE THAN 10%)

STATE OF LUXURY REAL ESTATE 2021 | 78

North America

Expectations for the Luxury Market: Buyers from North America

(CONTINUED)

Is the residence you plan to buy...? g NORTH AMERICA LUXURY BUYERS

73%

g MEXICO

g UNITED STATES AND CANADA

76% 63%

15% PERSONAL USE

13%

15%

INVESTMENT OR RENTAL PROPERTY

23% 12%

LAND/BUILDABLE LOT + OTHER

(PRIMARY, SECOND OR VACATION RESIDENCE)

STATE OF LUXURY REAL ESTATE 2021 | 79

NEW YORK, NY, USA | $13,975,000

NORTH AMERICA DETAILED TABLES

STATE OF LUXURY REAL ESTATE 2021 | 80

North America — Detailed Tables

Luxury Buyer North America Profile: Demographics and Finances Age

Children in Household

Employment Status Employed, as a…

89%

$250K to $299K

20%

Under USD $1M

18%

Business owner

36%

$300K to $499K

41%

USD $1M to $2.4M

24%

$500K to $999K

37%

USD $2.5M to $4.9M 26%

Average age

40.9

18–29

14%

Under 18 years of age

52%

30–39

36%

18 years or older

26%

40–49

27%

50–59

15%

No children in the household

16%

60+

Marital Status Single, never married

15%

Married

80%

Not a parent of a child

14%

Executive in a business you do not own Manager of a division or department

Household Income in USD

23%

$1M or more Average

Net Worth Excluding Primary Residence

2% $501,919

USD $5M to $9.9M

15%

USD $10M+

12%

20%

otal Wealth Including Primary Residence T Average: USD $6,853,095

STATE OF LUXURY REAL ESTATE 2021 | 81

North America — Detailed Tables

Luxury Buyer North America Profile: Passions and Luxury Lifestyle Which of the following activities or interests are real passions in your life, if any? Top 10

Travel and hospitality

55%

Real estate

43%

46%

Electronics

52%

Financial services

42%

Fashion and style

45%

Automotive

52%

Home furnishings

42%

49%

Financial investing

44%

Jewelry and watches

51%

48%

Sports

44%

Apparel and accessories

47%

Fragrance, beauty, and personal care

38%

43%

Food and beverage

47%

Concierge healthcare

22%

Traveling

65%

Technology

54%

Dining at a restaurant Family time Shopping

47%

Watching TV or movies

Business

Passions: Noteworthy Distinctions for N.A. Luxury Buyers Versus Other Regions Parenting

Luxury Categories Used

Average number of luxury categories 4.9

Self-Described Purchase Habits: Luxury Products, Services, Experiences 29%

Rarely or never do this

12%

Frequently do this but not always

27%

Occasionally do this

48%

Do this all the time

13%

STATE OF LUXURY REAL ESTATE 2021 | 82

North America — Detailed Tables

Neighborhood Characteristics in Total | North America Luxury Buyers Setting

Age of Neighborhood

Urban/City

Established neighborhood (e.g., mature trees, older homes, Nature setting: Lake or river view + Secluded woodland + few open lots) 47% 44% Mountain or mountain view + Ocean + Desert + Rainforest 31% 47% Newly developed neighborhood Suburban/Town 13% 11% (e.g., all homes recently built, 38% open lots available) 40% Resort + Retirement community 11% 11% 39% 25%

Not in a neighborhood; private land 11% 14% Rural estate or homestead 6% 6%

4% Not sure 3% Other 0% 0%

g GLOBAL LUXURY BUYERS

g NORTH AMERICA LUXURY BUYERS

STATE OF LUXURY REAL ESTATE 2021 | 83

North America — Detailed Tables

Neighborhood Characteristics in Total | North America Luxury Buyers

(CONTINUED)

Neighborhood Features and Amenities Shopping centers

48% 41%

Medical facilities

46% 43%

Parks and recreation

Shared amenities for the neighborhood (e.g., pool, clubhouse, playgrounds)

34% 26%

44% 42%

Cultural centers (e.g., museums, libraries, national monuments)

33% 29%

Lots of privacy

44% 45%

Short commute to work/office building

33% 30%

Walkable

40% 48%

Gated community

31% 31%

Restaurants and night life

40% 42%

Golf course

24% 30%

Schools

37% 38%

Airport

21% 25%

Bikeable

36% 36%

Co-working spaces

20% 20%

g GLOBAL LUXURY BUYERS

g NORTH AMERICA LUXURY BUYERS

STATE OF LUXURY REAL ESTATE 2021 | 84

North America — Detailed Tables

Residence Characteristics in Total | North America Luxury Buyers Will your next residence be new, built in the past 5 years, or more than 5 years old?

What type of residence do you expect to buy? Single-family home/landed residences (built on a single lot, no shared walls)

33% 46%

Condominium/Apartment (single unit within a larger building; shared walls)

15% 12%

Townhouse (a single-family home that shares a wall with another)

16% 12%

High-rise penthouse apartment (top floors in a large building)

17% 11%

Branded hotel or resort residence (with access to its amenities)

9% 7%

Furniture

63% 66%

Land without buildings

7% 9%

Appliances

58% 61%

Houseboat/yacht

1% 2%

Electronics

57% 53%

Décor

51% 51%

Home gym equipment

43% 40%

Automobile

38% 41%

g GLOBAL LUXURY BUYERS

g NORTH AMERICA LUXURY BUYERS

New construction

41% 43%

33% Built in past 1–5 years 31% More than 5 years old 27% 24%

Additional Purchases for Your Next Home Apparel and accessories

38% 38%

Art for display 37% 33% Recreational equipment (e.g., bicycle, golf clubs, skis)

33% 29%

STATE OF LUXURY REAL ESTATE 2021 | 85

North America — Detailed Tables

Residence Characteristics in Total | North America Luxury Buyers

(CONTINUED)

What features or amenities are you looking for in your future home? Security system

61% 65%

Chef’s kitchen

46% 47%

Smart home technology (i.e., convenience)

59% 57%

Wellness amenities

44% 43%

Bathtub, hot tub, or spa

52% 58%

Playroom or family room

41% 41%

Sustainability technology (i.e., better for environment)

52% 39%

Home theatre

40% 44%

Great internet connection

52% 50%

Game room

36% 43%

Swimming pool

49% 51%

On-property guest house

32% 31%

Outdoor living area

47% 48%

Wine cellar

30% 32%

Dual-key residence (i.e., two separated living spaces with shared entrance at one address)

26% 25%

Rooms for live-in help

25% 24%

Concierge or valet services

25% 27%

Self-sufficient (can stay at home for longer periods of time) 47% 43% Home gym

47% 51%

Quiet spaces for each family member

46% 39%

Home office

46% 55%

g GLOBAL LUXURY BUYERS

g NORTH AMERICA LUXURY BUYERS

STATE OF LUXURY REAL ESTATE 2021 | 86

North America — Detailed Tables

Neighborhood Characteristics by Price Point | North America Luxury Buyers Setting

Age of Neighborhood

Urban/City

Established neighborhood (e.g., mature trees, older homes, Nature setting: Lake or river view + Secluded woodland + few open lots) 45% 41% Mountain or mountain view + Ocean + Desert + Rainforest 48% 41% Newly developed neighborhood Suburban/Town 10% 16% (e.g., all homes recently built, 46% open lots available) 36% Resort + Retirement community 9% 18% 26% 19%

Not in a neighborhood; private land 14% 11% Rural estate or homestead 6% 4%

2% Not sure 5% Other 0% 2%

g USD $1M TO $4.9M

g USD $5M OR MORE

STATE OF LUXURY REAL ESTATE 2021 | 87

North America — Detailed Tables

Neighborhood Characteristics by Price Point | North America Luxury Buyers

(CONTINUED)

Neighborhood Features and Amenities Walkable

51% 31%

Gated community

33% 25%

Parks and recreation

45% 32%

Golf course

32% 20%

Lots of privacy

45% 45%

Medical facilities

44% 42%

Cultural centers (e.g., museums, libraries, national monuments)

28% 36%

Restaurants and night life

43% 37%

Short commute to work/office building

28% 35%

Shopping centers

41% 37%

Airport

26% 23%

Schools

39% 36%

Shared amenities for the neighborhood (e.g., pool, clubhouse, playgrounds)

25% 27%

Bikeable

38% 24%

Co-working spaces

20% 20%

g USD $1M TO $4.9M

g USD $5M OR MORE

STATE OF LUXURY REAL ESTATE 2021 | 88

North America — Detailed Tables

Residence Characteristics by Price Point | North America Luxury Buyers Will your next residence be new, built in the past 5 years, or more than 5 years old?

What type of residence do you expect to buy? Single-family home/landed residences (built on a single lot, no shared walls)

48% 36%

Condominium/Apartment (single unit within a larger building; shared walls)

12% 8%

Townhouse (a single-family home that shares a wall with another)

12% 11%

High-rise penthouse apartment (top floors in a large building)

9% 20%

Branded hotel or resort residence (with access to its amenities)

6% 14%

Land without buildings Houseboat/yacht

g USD $1M TO $4.9M

g USD $5M OR MORE

New construction

40% 57%

33% Built in past 1–5 years 32% More than 5 years old 28% 10%

Additional Purchases for Your Next Home Furniture

62% 64%

10% 6%

Appliances

58% 64%

2% 2%

Electronics

57% 69%

Décor

49% 63%

Home gym equipment

43% 52%

Automobile

35% 52%

Apparel and accessories

34% 58%

Art for display 37% 51% Recreational equipment (e.g., bicycle, golf clubs, skis)

33% 44%

STATE OF LUXURY REAL ESTATE 2021 | 89

North America — Detailed Tables

Residence Characteristics by Price Point | North America Luxury Buyers

(CONTINUED)

What features or amenities are you looking for in your future home? Security system

67% 56%

Self-sufficient (can stay at home for longer periods of time) 42% 50%

Bathtub, hot tub, or spa

58% 58%

Game room

41% 54%

Home office

56% 54%

Quiet spaces for each family member

40% 34%

Smart home technology (i.e., convenience)

56% 61%

Playroom or family room

40% 46%

Great internet connection

51% 50%

Sustainability technology (i.e., better for environment)

38% 46%

Home gym

51% 49%

Wine cellar

32% 35%

Swimming pool

50% 56%

On-property guest house

29% 41%

Chef’s kitchen

49% 38%

Concierge or valet services

26% 35%

Outdoor living area

48% 45%

Rooms for live-in help

23% 31%

Home theatre

44% 45%

Wellness amenities

44% 38%

Dual-key residence (i.e., two separated living spaces with shared entrance at one address)

22% 37%

g USD $1M TO $4.9M

g USD $5M OR MORE

STATE OF LUXURY REAL ESTATE 2021 | 90

North America — Detailed Tables

Neighborhood Characteristics by Country | North America Luxury Buyers Setting

Age of Neighborhood

Urban/City

Established neighborhood (e.g., mature trees, older homes, Nature setting: Lake or river view + Secluded woodland + few open lots) 42% 45% Mountain or mountain view + Ocean + Desert + Rainforest 47% 47% Newly developed neighborhood Suburban/Town 9% 12% (e.g., all homes recently built, 36% open lots available) 46% Resort + Retirement community 25% 7% 17% 27%

Not in a neighborhood; private land 12% 14% Rural estate or homestead 2% 7%

5% Not sure 0% Other 0% 0%

g MEXICO

g UNITED STATES AND CANADA

STATE OF LUXURY REAL ESTATE 2021 | 91

North America — Detailed Tables

Neighborhood Characteristics by Country | North America Luxury Buyers

(CONTINUED)

Neighborhood Features and Amenities Shopping centers

52% 38%

Walkable

47% 48%

Medical facilities

56% 40%

Gated community

33% 31%

Lots of privacy

54% 43%

Bikeable

41% 34%

Parks and recreation

41% 42%

Short commute to work/office building

39% 27%

Schools

47% 36%

Golf course

20% 32%

Shared amenities for the neighborhood (e.g., pool, clubhouse, playgrounds)

33% 24%

Airport

31% 24%

Restaurants and night life

42% 42%

Co-working spaces

27% 18%

Cultural centers (e.g., museums, libraries, national monuments) 27% 30%

g MEXICO

g UNITED STATES AND CANADA

STATE OF LUXURY REAL ESTATE 2021 | 92

North America — Detailed Tables

Residence Characteristics by Country | North America Luxury Buyers Will your next residence be new, built in the past 5 years, or more than 5 years old?

What type of residence do you expect to buy? Single-family home/landed residences (built on a single lot, no shared walls)

43% 47%

Condominium/Apartment (single unit within a larger building; shared walls)

10% 12%

Townhouse (a single-family home that shares a wall with another)

14% 11%

High-rise penthouse apartment (top floors in a large building)

20% 8%

New construction

32% Built in past 1–5 years 34% More than 5 years old 2% 30%

Additional Purchases for Your Next Home

Branded hotel or resort residence (with access to its amenities)

8% 7%

Furniture

73% 64%

Land without buildings

4% 10%

Appliances

62% 61%

Houseboat/yacht

0% 3%

Electronics

54% 53%

Décor

65% 48%

Home gym equipment

48% 38%

Automobile

54% 38%

g MEXICO

g UNITED STATES AND CANADA

64% 38%

Apparel and accessories

56% 34%

Art for display 34% 33% Recreational equipment (e.g., bicycle, golf clubs, skis)

35% 27%

STATE OF LUXURY REAL ESTATE 2021 | 93

North America — Detailed Tables

Residence Characteristics by Country | North America Luxury Buyers

(CONTINUED)

What features or amenities are you looking for in your future home? Security system

66% 65%

Chef’s kitchen

62% 57%

Smart home technology (i.e., convenience)

71% 54%

Wellness amenities

41% 43%

Bathtub, hot tub, or spa

51% 46%

Playroom or family room

59% 37%

Sustainability technology (i.e., better for environment)

60% 34%

Home theatre

52% 43%

Great internet connection

58% 49%

Game room

61% 39%

Swimming pool

61% 49%

On-property guest house

36% 30%

Outdoor living area

54% 46%

Wine cellar

36% 31%

Dual-key residence (i.e., two separated living spaces with shared entrance at one address)

42% 21%

Rooms for live-in help

35% 22%

Concierge or valet services

49% 22%

Self-sufficient (can stay at home for longer periods of time) 49% 42% Home gym

53% 50%

Quiet spaces for each family member

44% 38%

Home office

58% 55%

g MEXICO

g UNITED STATES AND CANADA

STATE OF LUXURY REAL ESTATE 2021 | 94

SCANDICCI, ITALY | PRICE UPON REQUEST

EUROPE LUXURY BUYER TRENDS

STATE OF LUXURY REAL ESTATE 2021 | 95

Europe

The Five Pillars Among Luxury Buyers Work, Live, and Play at Home is having a profound impact on Luxury Buyers in the United Kingdom, as the country vacillates between half-measures of pandemic response. Delayed response at a country level means a longer wait to the return to normalcy and in a post-Brexit world where COVID-19 may be endemic, the medium-term future for the region is at greater risk. Overall, European Luxury Buyers are more impacted by this trend than the Global Affluent population. Freedom of Movement is a motivating factor for Luxury Buyers in Europe, and particularly the United Kingdom for the reasons stated previously. Residence features and amenities for those impacted by this trend include concierge for valet services, dual-key residences or on-property guest house and rooms for live-in help. Self-Reliance is the highest-rated trend among European Luxury Buyers, at 65, buoyed by Italy and Spain, and the United Kingdom. Privacy and security are key factors for consumers interested in Self-Reliance, but they are not the only ones. These buyers are more likely to be interested in resort-based living, having shared neighborhood amenities (pool, clubhouse, playgrounds), a game room, and medical facilities. Embracing Spontaneity means having a little fun at home. For European Luxury Buyers, this means a home theatre space to watch their favorite programs, a bath or hot tub to relax and unwind, or a home gym to get some activity after a long day working out of the house. Financial Confidence trails the Global Affluent average for Luxury Buyers, as noted in other global regions. For those who do rate highly, single-family homes in gated communities are of greater interest. Along with the privacy that offers, Luxury Buyers are seeking sustainability technologies in the home.

STATE OF LUXURY REAL ESTATE 2021 | 96

Europe

The Five Pillars Among Luxury Buyers g GLOBAL AFFLUENT AVERAGE

WORK, LIVE, AND PLAY AT HOME

61 60

g EUROPE LUXURY BUYERS

(CONTINUED)

g FRANCE AND GERMANY

FREEDOM OF MOVEMENT

g ITALY AND SPAIN

SELF-RELIANCE

EMBRACING SPONTANEITY

67 55

50 52

g UNITED KINGDOM

65 50

54 51 49

FINANCIAL CONFIDENCE

61 57 54 58

STATE OF LUXURY REAL ESTATE 2021 | 97

Europe

Market Demand and Pricing Affluent consumers in the five European markets studied echo the global reality of more buyers than sellers. Noted previously, the time periods are likely to change since people are surer of plans the closer they are to happening. Still, there is a strong pipeline of affluent buyers.

AMONG THOSE IN THE MARKET TO BUY IN THE NEXT 3 YEARS | Total Affluent from Europe g PURCHASE A RESIDENCE OR BUILDABLE LOT

g SELL A RESIDENCE OR BUILDABLE LOT

55% 41% When are you considering each of the following residential real estate market activities, if at all?

47% 30%

19% 11%

NOW–THE END OF 2021

17% 9% 2022

10% 9% 2023

13% 15%

2024 OR LATER

NOT CONSIDERING AT THIS TIME

NEXT 3 YEARS (NET)

STATE OF LUXURY REAL ESTATE 2021 | 98

Europe

Market Demand and Pricing

(CONTINUED)

Half of the luxury market in Europe is considering a home valued at USD $2.25 million or more with about one-in-five (22%) at the USD $5 million and above category. Luxury property continues to see strong demand in Europe. AMONG THOSE IN THE MARKET TO BUY IN THE NEXT 3 YEARS | Total Affluent from Europe (CONTINUED) g EUROPE TOTAL AFFLUENT BUYERS

g EUROPE LUXURY BUYERS AVERAGE

In what price range are you considering for your next residence? Use your best estimate for the home itself, not including furniture, décor, renovations or moving expenses.

$2.20

50%

45%

Million USD

$3.49

Million USD

27% 9%

16%

0% UNDER USD $1M

USD $1M–$1.9M

USD $2M–$2.9M

12%

USD $3M–$4.9M

15%

USD $5M–$9.9M

MEDIAN

$1.25

Million USD

USD $10M OR MORE

$2.25

Million USD

STATE OF LUXURY REAL ESTATE 2021 | 99

Europe

Market Demand and Pricing

(CONTINUED)

Among the markets studied in Europe, an estimated 1.75 million Luxury Buyers will be in the market over the next three years. Approximately one quarter of the affluent in these European markets are looking for a property at USD $1 million or more. Total Number of Households in the Market to Buy in the Next 3 Years

ESTIMATED AFFLUENT HOUSEHOLDS IN EUROPE

AFFLUENT IN THE MARKET IN THE NEXT 3 YEARS

LUXURY BUYERS IN THE MARKET (USD 1 MILLION OR MORE)

6.85 million 3.21 million 1.75 million

STATE OF LUXURY REAL ESTATE 2021 | 100

Europe

Expectations for the Luxury Market: Buyers from Europe France and Germany appear to be the most positive on the luxury market with nearly half (48%) thinking the market is getting stronger and with one-in-three (30%) expecting a significant increase in their personal property values in the coming year. Italy and Spain generally see a stronger luxury market with home values increasing and more buyers coming to market. Luxury Buyers on the continent are more interested in buying investment properties than those from the United Kingdom, which has a directionally stronger preference for personal use. Brexit will play a significant role in the economy and fortunes of the United Kingdom real estate market for the year to come. The Luxury Buyer there is generally quite confident in their expectations for improving property values and more buyers entering the market.

g EUROPE LUXURY BUYERS Which of the following statements best describes your point of view on the luxury residential real estate market?

44%

48%

g FRANCE AND GERMANY

g ITALY AND SPAIN

g UNITED KINGDOM

41% 41% 24%

27% 30% 17%

GETTING STRONGER

GETTING SOFTER

(MORE BUYERS THAN SELLERS)

(MORE SELLERS THAN BUYERS)

25%

30%

25%

19% 7% 4% 7% 10%

NOT CHANGING VERY MUCH

I DO NOT KNOW ABOUT THIS MARKET

STATE OF LUXURY REAL ESTATE 2021 | 101

Europe

Expectations for the Luxury Market: Buyers from Europe

(CONTINUED)

What do you think will happen to the value of your home over the next 12 months? g EUROPE LUXURY BUYERS

g FRANCE AND GERMANY

39% 38%

g ITALY AND SPAIN

g UNITED KINGDOM

42% 35%

30% 22% 16%

23% 22%

19%

17%

16% 10%

12% 11%

0% INCREASE SIGNIFICANTLY (UP MORE THAN 10%)

10%

INCREASE SOMEWHAT

LITTLE OR NO CHANGE

DECREASE SOMEWHAT

(UP BY 1% TO 10%)

(0% TO 1% UP OR DOWN)

(DOWN BY 1% TO 10%)

3% 2%

DECREASE SIGNIFICANTLY

NOT SURE

(DOWN MORE THAN 10%)

STATE OF LUXURY REAL ESTATE 2021 | 102

Europe

Expectations for the Luxury Market: Buyers from Europe

(CONTINUED)

Is the residence you plan to buy...? g EUROPE LUXURY BUYERS

g FRANCE AND GERMANY

g ITALY AND SPAIN

g UNITED KINGDOM

78% 67% 63%

61%

21%

28%

22% 10%

PERSONAL USE

INVESTMENT OR RENTAL PROPERTY

12%

18%

12%

LAND/BUILDABLE LOT + OTHER

(PRIMARY, SECOND OR VACATION RESIDENCE)

STATE OF LUXURY REAL ESTATE 2021 | 103

PARIS 7TH DISTRICT, FRANCE | €3,750,000

EUROPE DETAILED TABLES

STATE OF LUXURY REAL ESTATE 2021 | 104

Europe — Detailed Tables

Luxury Buyer Europe Profile: Demographics and Finances Age

Children in Household

Employment Status Employed, as a…

69%

$250K to $299K

37%

Under USD $1M

17%

Business owner

39%

$300K to $499K

33%

USD $1M to $2.4M

23%

$500K to $999K

27%

USD $2.5M to $4.9M 23%

Average age

40.7

18–29

17%

Under 18 years of age

50%

30–39

28%

18 years or older

20%

40–49

31%

50–59

20%

No children in the household

15%

60+

Marital Status Single, never married

15%

Married

72%

Not a parent of a child

15%

Executive in a business you do not own Manager of a division or department

Household Income in USD

28%

$1M or more Average

Net Worth Excluding Primary Residence

2% $476,383

USD $5M to $9.9M

20%

USD $10M+

12%

16%

otal Wealth Including Primary Residence T Average: USD $7,269,161

STATE OF LUXURY REAL ESTATE 2021 | 105

Europe — Detailed Tables

Luxury Buyer Europe Profile: Passions and Luxury Lifestyle Which of the following activities or interests are real passions in your life, if any? Top 10 Traveling

75%

64%

Food and beverage

49%

Jewelry and watches

60%

Real estate

45%

Automotive

57%

Financial services

43%

Apparel and accessories

56%

Home furnishings

42%

49%

Fragrance, beauty, and personal care

50%

Concierge healthcare

26%

47%

Electronics

50%

53%

Cooking at home

51%

Financial investing

51%

64%

Family time

60%

Technology

56%

Luxury brands and products

54%

Watching TV or movies

Gourmet food and beverages

Travel and hospitality

Sports

Dining at a restaurant

Passions: Noteworthy Distinctions for European Luxury Buyers Versus Other Regions No unique distinctions from other regions

Luxury Categories Used

Average number of luxury categories 5.4

Self-Described Purchase Habits: Luxury Products, Services, Experiences Rarely or never do this

Frequently do this but not always

41%

Occasionally do this

37%

Do this all the time

14%

STATE OF LUXURY REAL ESTATE 2021 | 106

Europe — Detailed Tables

Neighborhood Characteristics in Total | Europe Luxury Buyers Setting

Age of Neighborhood

Urban/City

Established neighborhood (e.g., mature trees, older homes, Nature Setting: Lake or river view + Secluded woodland + few open lots) 47% 44% Mountain or mountain view + Ocean + Desert + Rainforest 31% 48% Newly developed neighborhood Suburban/Town 13% 10% (e.g., all homes recently built, 30% open lots available) 40% Resort + Retirement community 11% 4% 39% 21%

Not in a neighborhood; private land 11% 22% Rural estate or homestead 6% 14%

4% Not sure 3% Other 0% 2%

g GLOBAL LUXURY BUYERS

g EUROPE LUXURY BUYERS

STATE OF LUXURY REAL ESTATE 2021 | 107

Europe — Detailed Tables

Neighborhood Characteristics in Total | Europe Luxury Buyers

(CONTINUED)

Neighborhood Features and Amenities Shopping centers

48% 40%

Medical facilities

46% 40%

Parks and recreation

Shared amenities for the neighborhood (e.g., pool, clubhouse, playgrounds)

34% 23%

44% 34%

Cultural centers (e.g., museums, libraries, national monuments)

33% 25%

Lots of privacy

44% 49%

Short commute to work/office building

33% 27%

Walkable

40% 44%

Gated community

31% 21%

Restaurants and night life

40% 40%

Golf course

24% 24%

Schools

37% 35%

Airport

21% 15%

Bikeable

36% 41%

Co-working spaces

20% 11%

g GLOBAL LUXURY BUYERS

g EUROPE LUXURY BUYERS

STATE OF LUXURY REAL ESTATE 2021 | 108

Europe — Detailed Tables

Residence Characteristics in Total | Europe Luxury Buyers Will your next residence be new, built in the past 5 years, or more than 5 years old?

What type of residence do you expect to buy? Single-family home/landed residences (built on a single lot, no shared walls)

33% 38%

Condominium/Apartment (single unit within a larger building; shared walls)

15% 9%

Townhouse (a single-family home that shares a wall with another)

16% 18%

High-rise penthouse apartment (top floors in a large building)

17% 14%

Branded hotel or resort residence (with access to its amenities)

9% 6%

Furniture

63% 63%

Land without buildings

7% 10%

Appliances

58% 49%

Houseboat/yacht

Electronics

57% 54%

Décor

51% 46%

Home gym equipment

43% 38%

Automobile

38% 31%

g GLOBAL LUXURY BUYERS

g EUROPE LUXURY BUYERS

New construction

41% 34%

30% Built in past 1–5 years 31% More than 5 years old 27% 36%

Additional Purchases for Your Next Home Apparel and accessories

38% 33%

Art for display 37% 31% Recreational equipment (e.g., bicycle, golf clubs, skis)

33% 29%

STATE OF LUXURY REAL ESTATE 2021 | 109

Europe — Detailed Tables

Residence Characteristics in Total | Europe Luxury Buyers

(CONTINUED)

What features or amenities are you looking for in your future home? Security system

61% 68%

Chef’s kitchen

46% 43%

Smart home technology (i.e., convenience)

59% 57%

Wellness amenities

44% 43%

Bathtub, hot tub, or spa

52% 59%

Playroom or family room

41% 37%

Sustainability technology (i.e., better for environment)

52% 47%

Home theatre

40% 36%

Great internet connection

52% 57%

Game room

36% 35%

Swimming pool

49% 63%

On-property guest house

32% 28%

Outdoor living area

47% 43%

Wine cellar

30% 34%

Dual-key residence (i.e., two separated living spaces with shared entrance at one address)

26% 21%

Rooms for live-in help

25% 26%

Concierge or valet services

25% 21%

Self-sufficient (can stay at home for longer periods of time) 47% 43% Home gym

47% 46%

Quiet spaces for each family member

46% 53%

Home office

46% 47%

g GLOBAL LUXURY BUYERS

g EUROPE LUXURY BUYERS

STATE OF LUXURY REAL ESTATE 2021 | 110

Europe — Detailed Tables

Neighborhood Characteristics by Price Point | Europe Luxury Buyers Setting

Age of Neighborhood

Urban/City

Established neighborhood (e.g., mature trees, older homes, Nature Setting: Lake or river view + Secluded woodland + few open lots) 48% 32% Mountain or mountain view + Ocean + Desert + Rainforest 46% 55% Newly developed neighborhood Suburban/Town 11% 8% (e.g., all homes recently built, 38% open lots available) 28% Resort + Retirement community 5% 1% 22% 19%

Not in a neighborhood; private land 21% 24% Rural estate or homestead 16% 7%

5% Not sure 4% Other 0% 10%

g USD $1M TO $4.9M

g USD $5M OR MORE

STATE OF LUXURY REAL ESTATE 2021 | 111

Europe — Detailed Tables

Neighborhood Characteristics by Price Point | Europe Luxury Buyers

(CONTINUED)

Neighborhood Features and Amenities Cultural centers (e.g., museums, libraries, national monuments)

25% 26%

Schools

35% 34%

Short commute to work/office building

29% 19%

Bikeable

42% 40%

25% 16%

Gated community

20% 26%

Walkable

48% 28%

Co-working spaces

10% 15%

Restaurants and night life

41% 40%

Airport

13% 23%

Golf course

19% 40%

Shopping centers

42% 33%

Medical facilities

39% 44%

Parks and recreation

32% 39%

Lots of privacy

50% 45%

Shared amenities for the neighborhood (e.g., pool, clubhouse, playgrounds)

g USD $1M TO $4.9M

g USD $5M OR MORE

STATE OF LUXURY REAL ESTATE 2021 | 112

Europe — Detailed Tables

Residence Characteristics by Price Point | Europe Luxury Buyers Will your next residence be new, built in the past 5 years, or more than 5 years old?

What type of residence do you expect to buy? Single-family home/landed residences (built on a single lot, no shared walls)

42% 26%

Condominium/Apartment (single unit within a larger building; shared walls)

10% 5%

Townhouse (a single-family home that shares a wall with another)

18% 20%

High-rise penthouse apartment (top floors in a large building)

15% 10%

Branded hotel or resort residence (with access to its amenities)

5% 9%

Land without buildings Houseboat/yacht

g USD $1M TO $4.9M

g USD $5M OR MORE

New construction

29% 50%

34% Built in past 1–5 years 29% More than 5 years old 41% 17%

Additional Purchases for Your Next Home Furniture

65% 57%

10% 8%

Appliances

51% 39%

0% 4%

Electronics

52% 59%

Décor

48% 43%

Home gym equipment

34% 49%

Automobile

28% 42%

Apparel and accessories

30% 43%

Art for display 27% 44% Recreational equipment (e.g., bicycle, golf clubs, skis)

26% 42%

STATE OF LUXURY REAL ESTATE 2021 | 113

Europe — Detailed Tables

Residence Characteristics by Price Point | Europe Luxury Buyers

(CONTINUED)

What features or amenities are you looking for in your future home? Security system

70% 65%

Wellness amenities

41% 50%

Swimming pool

63% 64%

Chef’s kitchen

40% 53%

Great internet connection

60% 47%

Playroom or family room

39% 32%

Bathtub, hot tub, or spa

60% 53%

Game room

37% 29%

Smart home technology (i.e., convenience)

56% 61%

Wine cellar

33% 37%

Quiet spaces for each family member

51% 56%

Home theatre

31% 51%

Home office

50% 38%

On-property guest house

27% 33%

Sustainability technology (i.e., better for environment)

46% 50%

Rooms for live-in help

25% 27%

Outdoor living area

45% 36%

Dual-key residence (i.e., two separated living spaces with shared entrance at one address)

21% 22%

Concierge or valet services

19% 28%

Self-sufficient (can stay at home for longer periods of time) 43% 43% Home gym g USD $1M TO $4.9M

42% 61% g USD $5M OR MORE

STATE OF LUXURY REAL ESTATE 2021 | 114

Europe — Detailed Tables

Neighborhood Characteristics by Country | Europe Luxury Buyers Setting

Age of Neighborhood

Urban/City

28% 19% 13%

Nature Setting: Lake or river view + Secluded woodland + Mountain or mountain view + Ocean + Desert + Rainforest 43% 49% 54%

Established neighborhood (e.g., mature trees, older homes, few open lots)

32% 49% 57%

Newly developed neighborhood (e.g., all homes recently built, open lots available) 33% 37% 19% Resort + Retirement community 2% 9% 3% Suburban/Town 9% 7% 15%

Not in a neighborhood; Rural estate or homestead 15% 11% 16% private land 28% 10% 24% Other 3% 4% 0% Not sure 7% 4% 0%

g FRANCE AND GERMANY

g ITALY AND SPAIN

g UNITED KINGDOM

STATE OF LUXURY REAL ESTATE 2021 | 115

Europe — Detailed Tables

Neighborhood Characteristics by Country | Europe Luxury Buyers

(CONTINUED)

Neighborhood Features and Amenities Shopping centers

33% 46% 44%

Walkable

33% 41% 61%

Medical facilities

36% 44% 41%

Gated community

21% 27% 16%

Lots of privacy

47% 36% 64%

Bikeable

36% 29% 61%

Parks and recreation

36% 30% 35%

Short commute to work/office building

32% 27% 20%

Schools

39% 36% 28%

Golf course

29% 24% 17%

Shared amenities for the neighborhood (e.g., pool, clubhouse, playgrounds)

20% 29% 23%

Airport

10% 9% 15%

Restaurants and night life

36% 50% 38%

Co-working spaces

12% 15% 7%

Cultural centers (e.g., museums, libraries, national monuments) 22% 26% 28%

g FRANCE AND GERMANY

g ITALY AND SPAIN

g UNITED KINGDOM

STATE OF LUXURY REAL ESTATE 2021 | 116

Europe — Detailed Tables

Residence Characteristics by Country | Europe Luxury Buyers What type of residence do you expect to buy? Single-family home/landed residences (built on a single lot, no shared walls) 31% 41% 45% Condominium/Apartment (single unit within a larger building; shared walls) 8% 11% 8% Townhouse (a single-family home that shares a wall with another) 23% 15% 15% High-rise penthouse apartment (top floors in a large building) 17% 18% 6% Branded hotel or resort residence (with access to its amenities) 5% 8% 7% Land without buildings 14% 0% 12% Houseboat/yacht 0% 3% 0%

g FRANCE AND GERMANY

g ITALY AND SPAIN

g UNITED KINGDOM

STATE OF LUXURY REAL ESTATE 2021 | 117

Europe — Detailed Tables

Residence Characteristics by Country | Europe Luxury Buyers

(CONTINUED)

Will your next residence be new, built in the past 5 years, or more than 5 years old?

Additional Purchases for Your Next Home

New construction

39% 42% 18%

Furniture 61% 67% 63%

Built in past 1–5 years

30% 26% 35%

Appliances 46% 57% 44%

More than 5 years old

31% 32% 47%

Electronics 58% 52% 49%

54% 48% Décor 41% Home gym equipment

38% 35% 40%

Automobile

45% 15% 26%

Apparel and accessories

32% 29% 38%

Art for display 35% 20% 34% Recreational equipment (e.g., bicycle, golf clubs, skis)

g FRANCE AND GERMANY

g ITALY AND SPAIN

30% 30% 27%

g UNITED KINGDOM

STATE OF LUXURY REAL ESTATE 2021 | 118

Europe — Detailed Tables

Residence Characteristics by Country | Europe Luxury Buyers

(CONTINUED)

What features or amenities are you looking for in your future home? Security system

58% 65% 86%

Home office

55% 34% 49%

Smart home technology (i.e., convenience)

52% 52% 68%

Chef’s kitchen

39% 36% 56%

Bathtub, hot tub, or spa

59% 58% 60%

Wellness amenities

49% 36% 40%

Sustainability technology (i.e., better for environment) 42% 42% 58%

Playroom or family room

24% 38% 54%

Great internet connection

47% 58% 71%

Home theatre

27% 23% 60%

Swimming pool

55% 72% 67%

Game room

31% 33% 44%

Outdoor living area

32% 38% 61%

On-property guest house

22% 22% 43%

Wine cellar

26% 40% 39% 20% 26% 18%

Self-sufficient (can stay at home for longer periods of time)

40% 23% 66%

Home gym

41% 38% 62%

Dual-key residence (i.e., two separated living spaces with shared entrance at one address)

Quiet spaces for each family member

52% 40% 65%

Rooms for live-in help

29% 24% 23%

Concierge or valet services

15% 17% 32%

g FRANCE AND GERMANY

g ITALY AND SPAIN

g UNITED KINGDOM

STATE OF LUXURY REAL ESTATE 2021 | 119

LONG BAY BEACH, TURKS & CAICOS | $18,500,000

KEY TAKEAWAYS FOR REAL ESTATE PROFESSIONALS

STATE OF LUXURY REAL ESTATE 2021 | 120

Key Takeaways

Market Trends Real Estate is the Leading Investment Category of the Day. In simple terms, there are two types of Luxury Buyers coming to market: those who act quickly to acquire a new property and those with a more patient approach, be it the timeframe to purchase, or a buy-and-sell game plan. The fast-acting buyer is generally well-qualified and intends to buy the home with cash on hand.

A polished proposal that highlights customer service, quality of offerings, and the firm’s reputation as a leader will go a long way to win this customer’s business.

Affluent Consumer Financial Confidence is High, but not Without Reservation. The overall concern is about risk and preparation is the key. When was the last time your firm evaluated the purchase process from the customer’s perspective? Where are the roadblocks and bottlenecks for various buyer types at your firm (e.g., foreign buyers, investment buyers, first-time luxury home buyers)? The perceived risk is not just financial loss but loss of lifestyle.

10.3 Million Households Globally in the Market to Buy a Luxury Residence Through 2023. Demand for luxury property is high and likely to remain high while supply is low and economic factors such as a strong stock market and low cost to borrowing are in place. Luxury developments in progress are poised for success as new construction and new neighborhoods are in the greatest demand. For sellers of existing properties, now is the time to renovate and update to match the buyer’s desire for new.

Prime property that is supported widely by services and infrastructure is the most attractive, and by emphasizing the collective strength of an area, a buyer’s confidence will have room to increase.

Luxury Buyers are looking for “new” and for lifestyle fit beyond their home within the neighborhood.

STATE OF LUXURY REAL ESTATE 2021 | 121

Key Takeaways

Consumer Trends & Brand Salience The Home Must Meet More Needs. The expectation is that Luxury Buyers will be at home more in the coming months. Having solutions for working, learning, and diversion at home will be more important than ever. Beyond these daily living solutions, the home will also need to be self-sufficient and forward thinking; in short, the must-have list is getting longer than ever.

Help buyers cut through clutter by featuring what they most desire. Learn this through conversations related to sustainability, technology, security, and convenience amenities.

Expanding Their Borders. A selection of Luxury Buyers are seeking properties in another country with one goal being a second passport. Beyond the reason why, consumers will need help and guidance through this process and local traditional broker/agents are in a position to help.

International buyers have special needs for guidance on purchasing, owning, and living in a new country. A polished document that outlines this process in clear language — not marketing-speak or legalese — will grow confidence in buyers.

Extended Shelter-In-Place is a Likely Reality. Luxury Buyers are interested in properties that offer lots of space outside the main living quarters, be it a guest house, a separate adjoined residence, or simply space for domestic help to live “with the pod.” The implication is a generally high concern for interacting outside their small group, which impacts the broker/agent and buyer relationship.

When meeting with buyers stress your adherence to safety protocols, and how that impacts the buying process. Transparency is important for both safety and confidence.

Competition for Luxury Buyers’ Business is High. Firm selection criteria focuses on the basics, quality offerings, customer service, adapting to new technology and a solid reputation. Branding and relationships take on greater meaning with moderateto-high end Luxury Buyers.

Branding includes a focus on corporate citizenship activity and the founder’s story or the brand’s provenance. Buyers will resonate with employees who embody similar values.

STATE OF LUXURY REAL ESTATE 2021 | 122

GREAT NECK, NY, USA | $4,375,000

STATE OF LUXURY REAL ESTATE SOLRE 2021

luxuryportfolio.com

State of Luxury Real Estate - 2021

Articles inside

Key Takeaways for Real Estate Professionals

President’s Welcome

Methodology