To high-net-worth-individuals (HNWI’s), their home is a reflection of their success. The latest report from Luxury Portfolio International backs this statement up, showing that the majority of HNWI’s polled view real estate as the most obvious indicator of wealth.
Their research shows this is not only a powerful indicator for North Americans but globally, with Europeans, Asians and buyers form the Middle East expressing a strong association between wealth and real estate. Thirty-eight percent of individuals surveyed are looking to purchase luxury real estate within the next three years.
For financial advisors and mortgage professionals engaged in working with HNWI’s, there are 2 key take-aways:
- HNWI’s view their home as a reflection of their success; knowing this, it pays to visit the homeowner in their home, at least for your initial first meeting. Taking a tour of the home will reveal more intimate details about who you’re working with, allowing the client to relax, open up and tell you their full story – something they may not necessarily be comfortable doing (fully) in your office. This will allow you to build rapport and trust.
- HNWI’s have an emotional attachment to their luxury home. In fact, “78 percent of those surveyed said their residence is a home, a place with emotional ties, rather than just a house”. With emotional ties involved and a luxury home signifying success both internally and externally to their peers, it’s no wonder a recent study by HomeEquity Bank found that “93% of homeowners surveyed do not want to sell their home”.
Financial advisors need to take a holistic approach to real estate if they want to retain HNW clients, giving the client options to remain in their home. Working with a mortgage professional is essential to giving clients options that satisfy both their emotional and rational ties to owning real estate.
Additional findings from this report:
- The top reason that luxury home buyers gave for the purchase of a personal residence is to improve their quality of life.
- Overall, 59 percent of luxury buyers prefer urban locations. North American was the only region where suburban locations were slightly more popular (46 percent).
- Europeans say that real estate is nearly twice as important as an original source of wealth as those in North America or the Middle East.
Luxury Real Estate: What Matters Most To Today’s Global Elite, available for download now at luxuryportfolio.com/whitepaper