The most sought-after cities for the wealthy: Miami 1st, Paris moves up to 5th place
During the health crisis, acquisitions continue! Everyone has had to adapt over the past two years, and the wealthiest have done the same. Against a backdrop of faster-than-expected economic recovery, the ranking of the world’s major cities has once again been turned upside down: Miami, Austin, Tokyo, Geneva and Paris make up the Top 5 of the BARNES City Index, a mix of blue chips and bets on economic attractiveness.
” In 2022, the BARNES City Index has never been so varied, featuring dazzling advances such as Madrid, Moscow and Prague, but also traditional blue chips such as London, New York and Tokyo. A reflection of the changes brought about by the health crisis and, above all, the adaptability of the world’s wealthy. “comments Thibault de Saint Vincent, Chairman of BARNES.
These are the main findings of BARNES’ annual survey. Each year, the international luxury real estate network analyzes a very precise segment of personalities and families. These are the HNWI* or UHNWI** for “High-Net-Worth Individuals” and “Ultra High-Net-Worth Individuals”. To be eligible for either of these two categories, you need to have assets of between one and thirty million dollars (or more).
Representing 5.4% of their wealth, luxury real estate may be the smallest component of their asset portfolio, but it plays an important role in the lives of UHNWIs. Most own at least one (if not several) vacation home(s) in addition to their main residence, not to mention the pied-à-terre they have chosen to buy, for themselves or their children, in their preferred major cities.
Richer and richer, younger and younger
Driven by entrepreneurial spirit and stock market performance in technology, public health and communications, the recovery from the health crisis was stronger than expected, and the UHNWI are the picture: the population of ultra-high-net-worth individuals rose by 5.5% in one year, to 295,450, while their overall wealth increased from $32.2 billion to almost $35.5 billion. Of the world’s 3204 billionaires, 670 became so in 2021, while the category of “super-billionaires”, whose wealth exceeds $50 billion, grew by 27%.
Another major development is that Generation Z (i.e., people born between 1993 and 2010) is settling in permanently. By 2025, they will account for 10-15% of UHNWIs, up from 4% in 2019; by comparison, baby boomers (born before 1945) will fall from 23% to 5-10% between 2019 and 2025; by 2025, Generation Y (1978-1992) will become the majority, accounting for 45-50% of the ultra-wealthy. Generations Y and Z, one of whose main traits is a high level of environmental awareness, will help to change the face of the market: currently the leading users of the second-hand and even third-hand luxury market, they are also the first to willingly commit to costly renovations, including work to bring properties up to energy standards. Attentive to the origin of raw materials and the ecological weight of materials, they will contribute to establishing an ethical and eco-responsible footprint in the world of luxury real estate.
Miami 1st ahead of Austin and Tokyo
At the top of the ranking are five cities that have convinced investors of both their attractiveness and their fundamentals: Miami, already a surprise in the Top 2020, where it was 4th, takes 1st place, followed by Austin, which leaps from 24th to 2nd place. Tokyo remains a strong third, followed by Geneva, up from 8th to 4th, and Paris, up from 7th to 5th. The United States takes the lion’s share, thanks to dazzling economic developments, while Japan and Europe, the “Old World”, manage to reinvent themselves.
“Old Europe has regained its former status, with five cities in the Top 10 (Geneva, Paris, London, Madrid, Stockholm), reflecting a return to the traditional blue chips that were the BARNES City Index regulars before the health crisis,” explains Thibault de Saint Vincent. The same applies to New York and Toronto, which are also making a comeback. Zurich, which held 1st place in 2021, falls to 11th place, a victim of the overheating of its real estate market, as do Stockholm and Copenhagen, which drop out of the Top 5.
Miami, the start-up city
The big surprise of the BARNES City Index 2021, Miami has shrugged off the constraints of the health crisis to prove that its new image as a thriving metropolis is no mirage. A sunny climate, the beauty of the beaches of Biscayne Bay, a highly advantageous tax system with no income tax for individuals and a corporate tax rate limited to 5.5%, a flourishing cultural life, the quality of schools, the healthcare system and universities, and a prestige market with prices that are still reasonable: all these assets have convinced HNWIs and major corporations, who have migrated from the North-East of the United States or California even before the coronavirus appeared. It is also the U.S. city with the highest number of new residents by 2021, 2nd for economic growth, 1st for start-ups (9.39% of the working population!) and 4th in the country in terms of school facilities. Home to no fewer than 1,000 multinationals and with an average age of 38.2, Miami is a buzzing global city.
“ Instead of putting the city to sleep, the Covid-19 epidemic has only served to highlight Miami’s strengths, making remote working widespread and hedge fund relocations much more frequent. Known as the Gateway to the Americas, Miami is open to Europe, Asia and the Middle East. “adds Thibault de Saint Vincent.
With the new arrivals, strong rental demand is bound to entice investors. Buyers, on the other hand, are turning to newer neighborhoods and those with proven rental capacity, particularly those in Edgewater (+40% for rents), downtown in the midst of renovation and Brickell (+30%). Homes in Miami Beach, Coconut Grove, Key Biscayne and Coral Gables remain stable, with a strong increase in the number of waterfront homes on offer. In fact, the most sought-after properties are oceanfront villas with pontoons on secure private islands, as well as penthouses with panoramic water views.
“ Rescued from the subprime crisis and preserved despite Covid-19, Miami has dusted off its image as a sleepy metropolis to become a leading destination for entrepreneurs and start-ups. Although prices are high, the Miami market has not yet reached the same peak as that seen during the last cycle. The horizon is therefore clear for 2022 in Florida! “he adds.
Austin, 2nd: “Bigger in Texas!”
A leap of 22 places, far ahead of New York (7th), Los Angeles (14th), Dallas (17th), San Francisco (29th), San Diego (30th), Washington (31st), Boston (34th), Chicago (41st, down from 21st)… Who would have predicted such petulance in Austin? The Texas capital will make a stunning entrance into 2nd place on the BARNES City Index in 2022, after being ranked 24th in 2021.
Less formal than Houston, more wild than Dallas, Austin has long owed its fame to the University of Texas, the iconoclastic country rhythms of Willie Nelson and its equally offbeat motto, “Keep Austin Weird”. ” Today, the capital of Texas boasts a vibrant cultural life, including the South by Southwest festival, brand-new skyscrapers and an authentic downtown area devoid of big-name retailers. This, combined with the absence of personal income tax, a cost of living 40% lower than in New York and very reasonable prices, has earned it the status of a “supernova” or metropolitan area with high growth potential, according to PwC’s Emerging Trends in Real Estate report. “analyzes Thibault de Saint Vincent.
Luxury real estate prices rose more than those of New York and major Californian cities in the first three quarters of 2021: the Austin market starts at $2.34 million (€2.12 million), up 33% on 2020 and 44% on 2017, according to the Wall Street Journal. High-end homes, which took nearly four months to sell five years ago, are now sold in less than two months; the median home price climbed $100,000 in 6 months last year!
The lively, upscale downtown neighborhoods of Barton Hills, Barton Creek, Zilker, Rosedale, Windsor Road, Bouldin Creek, South River City and Cherrywood are seeing their prices soar, while villas and penthouses along the banks of the Colorado River, villas in gated communities and large condos overlooking downtown are snapping up like hotcakes.
” In fact, demand far outstrips supply, a situation that should guarantee annual price rises in excess of 10%. All the more so as economic activity accelerates every year thanks to digital technologies, directly challenging Silicon Valley. “he continues. Following in the footsteps of Tesla and Oracle, who have already set up shop in Austin’s Silicon Hills, Apple plans to open a $1 billion campus there in 2022. Pending a stabilization in the number of transactions, Austin, a city of barely 1 million inhabitants, should thus continue to grow and investments appreciate…
It’s worth noting that Texas seems to be bringing its metropolises with it, since Dallas has also been catapulted from 32nd to 17th place… As they say over there, “Everything is bigger in Texas”!
5th in the ranking, Paris is magic
Ahead of London, New York and Los Angeles, Paris is the only city, along with Tokyo, to regain its former position in the BARNES City Index Top 5, moving up from 7th to 5th place. For Thibault de Saint Vincent: ” After staying the course through a risky 2020, the City of Light proved its refuge value, making 2021 a record year, with increases of 5 to 10% for quality properties located on high floors in beautiful luxury buildings, and for properties with terraces and gardens. On the other hand, properties with defects and nuisances fell by 10-15%. “.
Investors have also recognized the renewed attractiveness of the capital, with the development of the Grand Paris Express and the 2024 Olympic Games. The Hauts-de-Seine region is also a strong performer in the prestige real estate market, thanks to increased demand for larger surface areas and outdoor spaces, attracting Parisian buyers in search of a better quality of life. For the same reasons, the Yvelines has seen its popularity confirmed and even accelerated in 2021.
* Ultra High-Net-Worth Individuals: individuals or families with assets of at least thirty million dollars.
** High-Net-Worth Individuals: individuals or families with wealth between one and thirty million dollars. BARNES CITY INDEX 2021 :
The Top 10 is more or less back to where it was before the health crisis, with Tokyo and London retaining 3rd and 6th place respectively, Paris moving up from 7th to 5th and New York from 11th to 8th. The previous Top 5 was made up of Zurich, Copenhagen, Tokyo, Miami and Stockholm: with the exception of Tokyo and Miami, Zurich fell to 11th place, Copenhagen to 15th and Stockholm to 10th. A number of new cities are becoming popular with HNWI and UHNWI investors: Luxembourg, Taipei, Mumbai, Dubai, Cape Town and St. Petersburg have moved up to 28th, 37th, 39th, 47th, 49th and 50th place respectively.
Established by BARNES on the basis of practical, emotional and financial criteria over a one-year period. 
PRICE INDEX FOR THE 5 HIGHEST-RATED CITIES (€/m²) : 
WHAT CAN YOU BUY FOR 1 MILLION EUROS IN THE 5 TOP-RANKED CITIES? 
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