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Côte d’Azur tops list of the world’s exclusive residential enclaves

The Côte d’Azur has claimed the number one spot in a new list of the world’s most successful luxury residential enclaves. 
  • Research identifies the world’s top 20 prime residential leisure enclaves
  • 34% growth in UHNW segment has fuelled demand for ultra-prime secondary residences in exclusives enclaves around the world
  • New wealth sources from Russia and the Middle East driving property purchases in leisure enclaves
  • Cultural differences, legal and tax systems, and financing all important factors in buying process

The Côte d’Azur has claimed the number one spot in a new list of the world’s most successful luxury residential enclaves, published today. 

The Candy GPS report - produced by Candy & Candy, Savills World Research and Deutsche Asset & Wealth Management - identifies the top 20 prime leisure locations where the global super wealthy are purchasing additional properties. Over 60 international leisure hotspots were identified in the research and analysed based on global reach, real estate values, exclusivity and luxury tourism.

View the report online

With the price of a typical five bedroom property in the Côte d’Azur now exceeding $28.5 million, this sought-after region is the ultimate and most expensive leisure enclave for home transactions among the ultra-wealthy, attracting buyers from across Europe, North America and most actively at present, from the Middle East and Russia. 

Two further European enclaves also feature in the top five of the luxury residential enclaves ranking; Sardinia’s Costa Smeralda - which boasts a vast luxury property portfolio across its 35 mile coastline - and Monaco, where there is currently a five bedroom villa in the region’s Cap Ferrat enclave on the market for €58 million.   

Several Caribbean locations feature in the top 20. The small and exclusive island of St Barts ranks third overall, where prices have been sustained by the scarcity of stock at the very top end of the market and the continuing influx of buyers from new sources. The much larger island of Barbados came sixth in the world ranking, partly due to the high volume of British buyers now purchasing leisure properties. The new and emerging Caribbean resort of Canouan, part of St Vincent, also features in the top 20 following significant infrastructure investment and major upgrades to its airport, that have brought more of the global wealthy within its reach and with property prices now average $6 million for a five bedroom villa. 

Away from the sun, the ever popular ski resorts of Aspen and Vail in the US and Courchevel in France ranked highly. Switzerland’s premier resorts of St Moritz, Gstaad and Verbier also featured in the top 20, where prices are considerably higher than Courchevel, reflecting the profile of their buyers and the relatively strong Swiss franc. Historically the Swiss Alps market has been dominated by British and other Northern European buyers, but the last few years have seen increasing investment from Asian buyers. Asking prices for chalets in these exclusive ski resorts are more than $1,200 per square foot.

Alongside Europe’s high profile ski and sun enclaves, EMEA as a whole encompasses a diverse range of other established and emerging luxury residential property enclaves. With its beachside homes, Sylt - the northernmost island in Germany - has long been associated with the German jet set. In Africa, the Cape winelands are emerging as a luxury second home destination, while the Seychelles are seeing increasing second home buying activity, complementing their existing luxury vacation offer. 

Buying trends

North America has the world’s largest concentration of ultra-high-net-worth-individuals with around 65,000 in 2012. The report finds that this wealth is home-loving and buys primarily in Caribbean and North American hot spots, highlighting the importance of domestic wealth to luxury residential enclaves.

Russian wealth is a key driver for many of the luxury enclaves featured in the list. Buyers from Russia are primarily acquiring properties in the Mediterranean, the South of France, Italy and increasingly in emerging destinations in the Eastern Med such as Montenegro. This buying group is also particularly active in the United States and the Caribbean. 

Middle Eastern buyers are also becoming more active in the global ‘additional home’ market. Not surprisingly they are already the dominant buyer group in Dubai and Abu Dhabi; today they are also to be found in the key luxury Mediterranean resorts and have been high profile investors in Marbella and the Costa Smeralda. 

Asia, in spite of having an UHNW population of 43,000 individuals, does not have a culture where additional home ownership in leisure destinations is usual. Real estate purchases are concentrated in urban centres and in just a handful of leisure enclaves, such as the Thai resorts of Phuket and Koh Samui, Bali in Indonesia, and Niseko in north Japan, which is popular for skiing. Much of the ‘additional home’ buying activity in the region comes from Europeans, Americans and Australians working or doing business in Asia. Hainan Island is an exception to the Chinese preference for urban homes and is emerging as a high-end destination for China's wealthy. Meanwhile, recent Chinese purchases of Bordeaux vineyards suggest a potential new wave of lifestyle purchases by this buying group. 

New geographies of wealth 

The growth of the market for prime enclaves in leisure destinations can be directly attributed to the increase in the number of UHNWIs over the past few years, which increased by 34% between 2009 and 2012. 

“The growth of UHNWIs has fuelled demand for prime secondary residences in exclusive leisure enclaves around the world,” said Nick Candy, CEO of Candy & Candy. “In the same way that we have seen exponential real estate growth in global cities over recent years, we expect to see the same level of growth and property values replicated in the top luxury leisure enclaves where the world’s super rich are choosing to purchase additional homes.”

Yolande Barnes, Director, Savills World Research, who conducted the analysis, said: “The motives for buying in any one of the exclusive enclaves listed in the research are as many and varied as the people that inhabit them. UHNWIs operate on a truly global basis and their choice of location for additional homes is a footloose one based on their passions, interests, values and perceptions of different places”.

The top tier of global wealth underpins demand in these locations as an enclave’s relative popularity can rise or fall by the number of elite groups who buy or take vacations there. In a competitive marketplace with a mobile demand base, prime areas for additional homes are increasingly diversifying their offer. Phuket, for example, may be best known for its beaches but it also offers championship golf courses; the Monterey Peninsula in the US is famous for Pebble Beach and Cyprus Hill golf courses, but residents also enjoy proximity to the coast for deep-sea fishing and sailing. 

Financial Complexities

The report also outlines the financial complexities of UHNWI leisure property purchases in today’s economic climate, with cultural differences, legal and tax systems, and financing all complex factors in the process.

Balaji Prassana, Head of Lending and Deposits for Deutsche Asset & Wealth Management, said: “Location, square footage and finish are the obvious driver’s of a property’s value – but at the luxury end of the market, there are other factors to consider. Buyers need to have a strong understanding of the legal and tax considerations to ensure they are actually getting what they are paying for. These considerations can vary significantly depending on a country’s regulatory, tax and legal landscape.

“It is also important to consider macro-economic factors when buying a leisure property in the luxury sector, especially when some destinations across Europe are going through periods of economic upheaval, with not insignificant consequences for UHNWIs.”

Yolande Barnes concludes: “Ultimately, it is the combination of global wealth creation and fashion that will determine the next playgrounds of the rich and famous. It will be interesting to see whether Asian buyers start to adopt the European and North American preferences for sun, sport and skiing or whether they will continue to cling to more urban centres for rest and recreation. We may even see new forms of luxury enclave emerge from Asia in the future.”


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