Investing in real estate always involves risks. An attractive investment is one in which the property has high liquidity and its sales value increases over the years. What properties can meet such 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.
Collectible real estate - an emerging trend
Many years ago we introduced the concept of collectible real estate. This is the kind of real estate that has no analogues on the market and is valuable in terms of art. It is the kind of real estate that remains in demand over the years without loosing its value. Such projects can not be many, they require a great time for the elaboration of the idea, concept, architecture, interiors and landscape. Its cost depends on the chosen plot of land where it is to be built, its size, the property that surrounds it.
Today, few people think about this approach to investment, in a world ruled by stereotypes and trends, but they make this world into a primitive understanding of aesthetics. Everything is subordinated to the desire to make money as quickly and as easily as possible. Accepted in the industry standard profitability of 12-17% dictates the use of patterns: quick construction, its low cost, following trends, almost imposed by the market. The fashion for "architecture" has already led to the creation of impersonality. Soon it will be impossible to distinguish which country we are in. The general impression is the same: the same shapes of modern houses made of glass and concrete. They differ only in size and minor architectural elements. Are there many memorable objects? A few!
Of course, everyone selects their own way and follows it, but the majority follow stereotypes. Since it all 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 deprived of the most important thing for the consumer - individuality. What the market is offering today, by passing it off as luxury real estate, is pure profanity. If the consumer does not see anything else on the market, what does he have to choose? He is forced to buy what this market is offering. It is essentially a circular bail out of architects, builders, designers and real estate agents. It is the imposition of new values, which are essentially nothing more than industrial design.
This general tendency towards the decline of aesthetics and the transformation of everything into mass-market, including luxury real estate, is frightening. The unfortunate consumer does not even realize what a global adventure he is involved in.
In fact, by buying this uniform type of real estate he gets into a complete dependence on the market in the future. One day, when he wants to sell it, he finds that it is going to be incredibly difficult to sell it.
If the construction industry for the middle class has its own rules, separate from the luxury segment, then in the luxury sector such shortsightedness, could lead to fatal consequences. Today, the world, immersed in a global financial crisis, where larger and larger bubbles mature, in unleashed military conflicts, in the money-making out of thin air through stock exchange instruments and cryptocurrency, a world in which no material values are created, is beginning to change. So far it is becoming visible only to a part of investors, whose interests diverge from the dictates of the market, and who can look a little further beyond the horizon, understanding how trends will change in the near future.
Today's rising energy prices and the unpredictable nature of the world economy, no matter what politicians tell us, already show that the world is changing more and more toward a greater and greater division and a widening gap between the rich and the poor.
The possession of luxury goods is returning to normal. Their consumers are becoming, and most likely to become, not just the rich, but the ultra rich, whose preference is more and more about having individuality in everything. This trend is already taking place in the world, and it is only going to expand in the future.
And then what happens to all the so-called abundance of villas and houses, now classed as luxury real estate? Their value and sales values become unsustainable on the market for new luxury homes. New trends are emerging to replace them.
The Ultra rich, who will stay the ruling force in the luxury industry, look for new aesthetics, where their individuality is not hindered by any tendencies or tricks of the market. Everything from architecture to lifestyle is about to change. It is unlikely that style od "boxes" remains their choice.
A new generation of developers
This means we need a new generation of developers who are able to break those stereotypes and go forward, becoming pioneers of the luxury real estate market. I was lucky enough to meet unique investors in Milan, whose concept of luxury fully matched 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 will appear a special caste of developers whose interests are limited to ultra luxury property only. But such real estate would require a completely different approach to its creating and promoting on the market.
First, it would affect the architecture itself. The houses of the future won't be able to compete with the architecture of the future, which is more and more a symbiosis with nature, with ecology. A different aesthetic is being born. The uniqueness of real estate in everything comes to dominate.
Uniqueness is the basis for the formation of a new market. The value of such real estate would be determined not so much by its square meters and views, but by the symbiosis of a new approach to architecture, interior design and landscape, where everything is subordinated to one goal: 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 a one-off item. It is not a question of custom made property, it is a new approach to the creation of turnkey real estate, when the consumer receives a collection of 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 creating a truly collector-grade property, this kind of investment will always prove to be reliable. And even if in the future we want to sell such real estate, it will not be difficult at all.
Moreover, the new generation of developers of this generation will also spawn a new generation of investors. Today they simply have nothing to offer to investors. Creating uniqueness requires talents from the creators, tremendous work, and time. But success comes only to those who are not afraid to go forward, standing up for their goals. It's a multitasking task.
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 creating real estate projects, no one has been able to achieve what they want. Here are a few examples of this.
Villas bearing the names of Lamborghini, Fendi and Carl Lagerfeld. Do these developments in any way reflect the chosen brands. The maximum of fantasy is just to buy furniture from the 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 banal stereotypes and lack of creativity.
A new generation of investors
With the appearance of new proposals on the market at the ultra luxury level, such projects must be supported by a high level of service. Buying such a property, the buyer should not just get another house, but an additional package of services, an integral part of such project. It is, firstly, a butler - the main manager the property. All other staff, such as maids, gardeners, technical workers remain under his supervision. Buying such a property, the consumer should not feel discomfort with its maintenance.
Originality dictates the selling price, luxury is sold based on the looks of the property, the presence of inherent works of art in the décor, which themselves add value. Only then, the rate of return on such projects becomes incommensurate with the average in the market today. Uniqueness gives an investor an opportunity not just to make a profit, but to make a super profit, and thus make the project highly profitable. Today, investors in this segment of the market are looking for just such projects. There are very few of them, and their supply is clearly lagging behind demand, which means that they are obviously in demand in the market.
A meeting between an ultra luxury developer and such an investor could change the world.