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What are the new trends in the luxury real estate market across the world and in Italy? Who are the main investors in luxury property in 2020? What are buyers looking for in a high-end property? Let's have a look at the answers to these questions with the help of experts from Coldwell Banker.

The major trends in luxury real estate

  • Wellness Real Estate

The 2020 edition of "The Report - Global Luxury Market Insights" by Coldwell Banker Real Estate has identified the main trends in luxury real estate. Among the emerging trends, what is known as "Wellness Real Estate", which sees the convergence between wellness and real estate as its founding pillar, responds to the growing demand for buildings that have a positive impact on the holistic health and well-being of the people living and working in them. This is a trend that is also sure to continue in Italy in the wake of the COVID-19 crisis.

Not just in Italy has this sector been growing. Globally, the sector has grown by 6.4% each year from 2015 to 2017 and is expected to reach a global market value of $198 billion in 2022, according to the Global Wellness Institute (GWI). From custom-designed homes and new condominium buildings to residential designed for communities, attention to eco-friendly and natural environments, as well as design, is becoming the rule rather than the exception in the real estate choices of the new rich.

  • The shift of the rich towards new areas

In general terms, there is a shift in major investment in luxury real estate from big cities to smaller centers, due to factors including different lifestyle preferences, new job opportunities, differences in the value of the property purchased and a desire to reduce taxes. Once again, the coronavirus crisis will have an influence here, with an increasing number of buyers considering properties in smaller towns and more rural areas in Italy and beyond.

  • The influence of Millennials and new families

Millennials, i.e. those born in the 80s and 90s, are among the driving forces of today's economy. In a global sense, the consulting firm Accenture has predicted that the approximately 80 million people born between 1980 and 2000 will spend 1.4 trillion dollars this year, nearly 30% of total retail sales. Many of the millennials and young families entering the most important phase of their careers today are also at the point in their lives where they are most likely to improve what is their home. The luxury market is therefore responding in a timely manner to provide them with the types of properties they most want to buy.

What are the luxury must-haves of 2020?

According to Coldwell Banker, these are the main demands for those looking for luxury homes in 2020:

  • Outdoor spaces. Almost 72% of respondents in a survey by Coldwell Banker said that outdoor living spaces are a priority for them. The popularity of outdoor living spaces reflects a general trend that sees people not only wanting to be closer to nature, but maximising the usable space in their homes. This first request is accompanied by the need for flexible spaces and offices in the home, therefore multifunctional areas for people who want to improve their well-being through smart working. In this way a dining room can become an area used for meetings and a business room.
  • Home automation. 81% of respondents said that home automation is the most important must-have. They are therefore looking for intelligent security systems, wireless audio systems and docking stations for electric cars.

  • Modern and contemporary style. High percentages also show that luxury buyers prefer floor plans with open spaces and less formal layouts. They are looking for the perfect environment for their family and at the same time ideal for entertaining guests.
  • New builds. 68% luxury real estate experts stated that buyers prefer buildings where no renovation work is needed and where it is possible to move in a very short time.

Luxury real estate: the situation in Italy

Italy continues to have wide availability of high-end properties in destinations that continue to attract wealthy buyers: from farmhouses in Tuscany, to villas along the coast and on Italy's islands, or the charm of cities like Rome, Milan, and Venice. A great bonus for potential buyers is the ample opportunity to do real business due to the slow economic growth of the country after the health crisis.

"Property prices in most Italian locations, desired by foreign buyers, are on average at an all-time low in the last 20 years," says Cassiano Sabatini, Vice President of Coldwell Banker Italy. "In Italy, however, the real estate market is gradually recovering, with demand and residential construction on the rise, despite the struggling economy. The foreign buyer client currently has tax advantages to transfer their tax residence to Italy as a flat tax".

"The luxury real estate market," adds Sabatini, "is travelling on a double track: on the one hand, historic properties with obsolete features are suffering price decreases, while the market for renovated luxury homes in highly desirable areas is experiencing an upward trend".

Sabatini also points out that the luxury market in Italy is largely a foreign affair, with 80% of property buyers with a price above one million euros coming from abroad, and a "vast majority" of requests coming from the United States (17.9%), followed by Germany (13%) and Great Britain (12.4%). Americans prefer villas and farmhouses by the sea or lake and tend to buy in regions such as Lombardy and Tuscany, Puglia, Sardinia, Sicily and the Amalfi Coast.