Tarpon Island, a private island in Palm Beach, Florida, sold for $150 million in May 2024.
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A version of this article first appeared in CNBC's Inside Wealth with Robert Frank, a weekly guide for high-net-worth investors and consumers. Sign up to receive future editions delivered straight to your inbox.
Sales of ultra-luxury homes in New York, Miami and Palm Beach, Fla., rose in the second quarter, even as they declined in much of the rest of the world, according to a new report.
The number of homes sold for $10 million or more in the second quarter rose 44% in Palm Beach, 27% in Miami and 16% in New York, according to a report from real estate firm Knight Frank.
According to the report, New York led the nation in sales over $10 million, with 72 sales, its highest total in two years. Miami came in second with 55 sales, followed by Los Angeles with 42 and Palm Beach with 36. Los Angeles saw a 29 percent drop in sales over $10 million, largely due to a new “mansion tax,” which adds a 5.5 percent fee to homes sold for more than $10 million, the report said.
The biggest sale of the quarter was the $150 million deal in May to buy Palm Beach’s only private island, reportedly bought by Australian infrastructure investor Michael Dorrell, according to the Wall Street Journal. In June, a historic 3.2-acre estate in Palm Beach sold for $148 million, while the Aman New York penthouse in Manhattan sold for $135 million in July.
While demand in many major luxury markets is slowing from its peak in 2021, ultra-wealthy buyers continue to pay record prices for rare properties, largely supported by bullish financial markets, Knight Frank said.
“Massive wealth creation has supported growth in the global luxury property sales market. The turnaround in markets such as Dubai, Palm Beach and Miami has helped offset the slowdown in some of the more mature markets,” said Liam Bailey, Knight Frank’s global head of research.
Globally, sales of homes worth more than $10 million in the 11 largest luxury markets tracked by Knight Frank fell 4% year-on-year to $8.5 billion.
Dubai leads the world in ultra-luxury real estate, with 85 sales in the second quarter, the report said. The city has seen a huge uptick as wealthy people from Russia, China, Europe and elsewhere move to Dubai for its tax-friendly and regulatory regimes. In 2019, Dubai recorded just 23 sales worth more than $10 million. In the past 12 months, it has recorded 436 sales — although sales in the last quarter were slightly down on last year and the first quarter, Knight Frank said.
London saw one of the biggest declines in the world, with sales of homes worth more than $10 million down 47% from a year ago due to concerns about higher taxes on the wealthy in the UK, according to Knight Frank.
Although luxury property buyers typically pay cash for their properties, lower interest rates around the world are expected to help support sales in the second half of the year, according to the report.
Last week, 29 contracts were signed in Manhattan for properties worth more than $4 million, according to the Olshan Luxury Market Report — the strongest week after Labor Day since at least 2006.
“With prices falling, overall transaction volumes are likely to rise by 2025,” Bailey said.
