More efficient hybrid second homes are emerging. UHWNIs and HWNIs are leading the way!
If many French people had already decided to buy this type of property before the health crisis, the successive confinements as well as the development of teleworking have only amplified the appetite of buyers wishing to fulfil their need for space and nature.
The development of teleworking has profoundly changed the use of the second home, which is gradually being transformed into a residence where one can spend up to 6 months a year.
Indeed, the residence no longer corresponds only to the traditional pied-à-terre where one came to relax only at weekends or during holidays.
Nowadays, those whose work can be done at least partly away from the office choose to relocate their workplace to their new haven of peace several days a week or several months a year, while keeping their main home in the city. Many "Seniors" are also adopting this lifestyle.
This hybrid status of the second home means that it is gradually being transformed into a part-time main residence where the personal and professional spheres sometimes intermingle. Hybrid residences or "Branded Residences" are thus emerging, offering numerous services for hybrid workers, in particular business centres, pleasant co-working spaces, the possibility of receiving collaborators, clients or partners in a relaxed and qualitative setting, just like in one's private club in Paris, London or New York…
Acquiring a traditional second home has a high annual cost which is less and less justified with the current development of Branded Residences
You need to have the financial means to acquire a traditional second home; a financing plan is necessary before taking the plunge.
Not forgetting that the bill can very quickly rise if you consider the maintenance and renovation costs, but also the current charges linked to taxation, notably through property tax. For a traditional second home, annual charges are typically estimated at between 3 and 5% of the purchase price.
This is why rental platforms such as Airbnb for second home owners have developed strongly. However, maintenance and professional rental management cannot be improvised for buyers who are often already very busy and live far from the property, sometimes in another country.
This is why UHWNIs (Ultra High Net Worth Individuals) and HWNIs (High Net Worth Individuals), who often own several residences around the world, are favouring the "Branded Residences" acquisition formula, which offers many advantages and shows the way to buyers with a more modest budget of between €500,000 and €1,500,000 for the acquisition of a flat or a villa with premium services.
According to the survey conducted by Wealth-X for a network of high-end international agencies, these UHNWIs (Ultra High Net Worth Individuals), who each have more than $30 million, numbered 295,450 in 2021 worldwide, 10% of whom own five or more properties. The report highlights three drivers that guide the real estate choices of these ultra-rich: the emotional side, the financial side and the practical side. On the emotional side, "Even if the purchase is made as a pure investment, the buyer will appreciate the property as if it were their own home. They will be all the more attentive if they plan to stay there one day" stresses Barnes. Although the emotional criteria are personal, the study states that "there is often a consensus on the criteria of size and volume, the history of the residence, the location and the external environment, the style and design, the quality of the construction and also the view”.
According to the Knight Frank Group, the number of HNWIs (Hight Net Worth Individuals) grew by 5% worldwide last year and could grow by 50% in ten years. The favourite urban destinations for these high net worth individuals in excess of $30 million remain London, followed by New York. The English capital also tops the list of the top ten cities for luxury real estate, published by Christie's International Real Estate. The property market remains tight, with no reason to fall, and values are at their highest: from 12,000 to 40,000 euros/sqm and more for a London flat.
Younger and younger players are emerging in the prime property market. "Millenials (1980/1996) and Generation Z (1996/2010) have a vision of authentic and committed luxury, respectful of the environment. They are sensitive to the orientation of properties, energy consumption, the relationship with nature, the origin of building materials, and respectful management"... says Miguel Espada, President of the Propriétés & Co group, developer of the eco-tourism projects Port Marseillan. "The flats and villas sold off-plan are integrated into their natural, social, cultural and economic environment. It was essential to work on a site as sensitive as it is exceptional with an architect and a hotel group sharing the same values!”