As central banks continue to increase interest rates in an effort to stave off inflation, they’ve also created a drag in the overall housing market, as homeowners face higher mortgage costs. For now, though, buyers are still eager to get their hands on prime property—especially if they feel they’re getting a deal.
“If it’s priced in the right range, and it’s a special property, it’s still moving,” says Chris Klug, broker and partner, Aspen Snowmass Sotheby’s International Realty. Klug says that more buyers on the ultra-high-end had been taking out mortgages in the last couple of years because of “incredibly advantageous rates,” now he’s seeing more cash buyers, private financing, and portfolio financing.
“The fear of missing out that was happening last year is now replaced by the fear of paying too much,” says Michael Pallier, managing director, Sydney Sotheby’s International Realty. “While the rates are going up, [buyers] may feel they don’t have to rush because, in six months’ time, prices might present a better value.”
Read more on how real estate is reacting to stock market fluctuations, inflation, and how cash buyers are making a comeback at LuxuryOutlook.com →
Learn what’s in store for luxury real estate in 2023.
The Sotheby’s International Realty® Luxury Outlook is an ambitious exploration into high-end residential markets across the globe. In this report, we follow the trends that are likely to shape the coming months across the world’s prime housing markets, from the resurgence of urban cities to the return of the international buyer.