![Property listed by Sotheby's Realty in Toronto](https://americanmarketer.com/wp-content/uploads/2017/01/Sothebys-Toronto-465.png)
While many believe that ultra-wealthy consumers make real estate purchases based on desire and not practicality, a Wealth-X study shows that these high-net-worth individuals make decisions based on practical, emotional and financial factors.
The Global Property Handbook from Warburg Realty and Barnes International Realty ranks London as the most desirable city based on factors within the practical, emotional and financial categories, followed by New York and Japan. 10 percent of individuals with a net worth of $30 million or more own at least five properties.
“The report finds that ultra-wealthy buyers mainly weigh their real estate purchasing decisions on three factors – practical, emotional, financial,” said Clelia Peters, president of Warburg Realty. "For them, real estate is a living asset, which sits at the intersection of the head and the heart.
“To reflect this, we have created the first-of-its-kind Alpha Cities Index to rank the top 50 most desirable cities based on their needs in these 3 categories. London is at the top, followed by #2 New York, #3 Tokyo, #4 Sydney, and #5 Paris,” she said.
Heart vs. head
After prices fell in the beginning of last year, the report showed that only properties who have a balance of optimum factors within practical, emotional, and financial have continued to grow in value.
Hudson's Bay Montreal
Research has showed that even though high net worth individuals have a substantial amount of funds to spend on real estate, they still make decisions based on practicality. For instance, most affluent businessmen prefer to live in close proximity to where they work.
Another major factor in purchasing real estate is the proximity to younger family members who are attending school. For instance, grandparents would like to live closer to their family by where the children are attending school and parents often buy real estate close to where their child may be in college.
More insight shows that more than 67 percent of high-net-worth individuals have self-made fortunes.
Knight Frank Hong Kong real estate listing