Real estate investments are always associated with risks. An attractive investment is one that is highly liquid and its sales value increases over the years. Which properties could meet such a high criteria? The answer begs for itself. Liquidity is largely determined by the location of the property, and its value to the market depends on its uniqueness.
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Collectible property - an emerging trend
Many years ago we introduced the concept of collectible property. This is the kind of a property that has no match on the market and has art value. It is the kind of real property that remains in demand over the years without losing its value. There couldn't be many projects of this kind, they require enormous time for elaboration of the idea, the concept, the architecture, the interiors and the landscape. Its cost depends on the selected plot of land where it is to be built, its size, which properties surround it.
Nowadays, few people think about this particular investment approach, stereotypes and trends rule the world, but they are the ones that turn this world into a primitive understanding of aesthetics. Everything is subordinated to the desire to earn as quickly and as easily as possible. Industry accepted standard of 12-17% yield dictates the patterns: quick construction, low cost, compliance with trends which is practically imposed by the market. The fashion for "architecture" has already led to the emergence of impersonality. Soon it will be impossible to distinguish the country we are in. The general impression is the same: the same shapes of contemporary houses made of glass and cement. They differ only in size and minor architectural elements. Are there many memorable buildings? A few!
Of course, everyone selects their own way and follows it, but the majority follow stereotypes. Since it sells, that's how it should be built, that's how it should be decorated, that's how it should be sold.
As a result of this impersonality, we are losing the most important thing for the consumer - individuality. What the market is offering today, by passing it off as luxury real estate, is just ignorance of the facts, what the consumer is led to believe. If the consumer does not see anything else on the market, what is left for him to do? He is to buy whatever the market has to offer. It is essentially a circular bail out of architects, builders, designers and real estate agents. It is the imposition of the new values, that are essentially nothing but industrial design and nothing more.
This general tendency towards the fall of aesthetics and the transformation of everything into a mass-market, including luxury real estate, is extremely frightening. The very unfortunate consumer does not even realize what a global adventure he is involved in. In fact, by buying this single-type real estate he gets into complete dependence on the market in the future. One day, when he wants to sell it, he finds it incredibly difficult to sell.
If the middle class construction industry has its own rules, different from the luxury industry, then such short-sightedness in luxury segment may lead to fatal events. Today, the world, immersed in a global financial crisis, where bigger and bigger bubbles mature, in military conflicts unleashed, in creating money out of the air by means of stock exchange instruments and cryptocurrency, in a world where no wealth is created is beginning to change. So far, it becomes visible only to a part of investors, whose interests diverge from the market pressure, and who are able to look a little further beyond the horizon, understanding how trends are changing in the nearest future.
Rising prices of energy and the unpredictability of the world economy, regardless of what politicians tell us today, shows that the world is changing more and more in the direction of separation and a widening gap between the rich and the poor. The possession of luxury goods is returning to its original status. Their consumers are becoming, and most likely are going to become, not just the rich, but the ultra rich, whose preference for having individuality in everything becomes more and more pronounced. This trend is already taking shape in the world, and it will only expand in the future.
And then what happens to all that abundance the so-called villas and houses, today counted among the luxury properties? Their value and sale prices would become unacceptable on the new luxury residential real estate market. New trends are coming to replace them. The Ultra rich, which remain the rulers of the luxury industry, would strive for new aesthetics, where their individuality is not replaced by any tendencies or tricks of the market. Everything is going to be changed, from architecture to lifestyle. It is unlikely that style of "boxes" would remain their choice.
A New Generation of Developers
This means we need a new generation of developers who are capable of breaking those stereotypes and going forward, becoming pioneers in the luxury real estate industry. I was lucky enough to meet unique investors in Milan, who's vision of luxury projects fully coincided with my vision. Today, unique projects designed for the ultra luxury segment are becoming trendy. The higher the level proposed, the more interesting such projects become for investors.
Sooner or later there should be a special caste of developers with their interests remaining only in the ultra luxury property sector. But such real estates require a completely different way of creating and promoting them on the market.
First, it would affect the architecture itself. The houses of "the boxes" style would not be able to compete with the architecture of the future, more and more a symbiosis with nature, with ecology. A different aesthetic is being born. The uniqueness of real estate comes to the forefront. Uniqueness becomes the basis for the new market. The value of such real estate is not so much determined by its square meters and views, but by the symbiosis of a new style of architecture, interiors and landscaping, where everything is subject to the same target: to get a unique property.
The liquidity of such a real estate is always very high, it is always in demand on the market, its value is not diminishing, but only growing over time, it always remains one-of-a-kind. It is not a matter of custom made property, it is a new trend of building turnkey properties, where the consumer gets a collectible class that meets all the requirements of luxury. Then, he is not just paying for another house, he is in fact investing in his lifestyle. When building a truly collectible class property, this kind of investment is always going to be reliable. And even if in the future we would like to sell this property, it is not at all difficult to do it.
Moreover, the new generation of developers of this level would also give rise to a new generation of investors. Today they simply have nothing to propose to investors. Creating uniqueness requires talent from the creators, tremendous work, and time. But success comes only to those who are not afraid of going forward, standing up for their goals. It's a challenge of many kinds.
What does the world have today? Let's do a little digging. The level of creativity in the world is extremely low. Even when big names are involved in real estate projects, no one has been able to achieve the results they were seeking. Here are a few examples of that.
Villas bearing the names of Lamborghini, Fendi and Carl Lagerfeld. Are these creations reflect the chosen brands? The maximum of imagination is just buying furniture produced by to these brands. All the rest is the same mediocrity. What does this tell you? Even the use of great names does not save real estate projects from the banality of stereotypes and the lack of creativity.
A New Generation Of Investors
When new Ultra luxury projects appear on the market, such projects should be supported by a high level of service. Buying such a property, the buyer should not just get another house, but an extra package of services, which is an integral part of the project.
Firstly, it is a butler to be the head manager of the property. All other staff, such as maids, gardeners, technical workers stay under his supervision. Buying such a property, the consumer should not feel uncomfortable with its maintenance.
Uniqueness drives the sales price, luxury is sold based on the property's look, the presence of inherent arts and crafts in the interior decoration that create additional value in their own right. Only then, the rate of return on such projects becomes incommensurate with the average on the market today.
Uniqueness gives an investor an opportunity not just to make a profit, but to super profit, and thus makes the project highly profitable. Today, investors in this segment of the market are looking for exactly this kind of projects. There are very few offers, and they are obviously lagging behind demand, which means that they are in high demand on the market.
A meeting with an ultra luxury developer and this kind of investor could turn the world upside down.