By Tara Loader Wilkinson, Editor in Chief
January 13, 2015
Last year was a mixed bag for the luxury industry. While certain sectors boomed, like ultra prime property in the US and super-yacht chartering in Europe, other segments suffered, like certain watchmakers, jewelers and high-end fashion brands. Luxury sales growth slowed to 5 percent globally – around €223 billion in 2014, down from 7 percent growth in 2013, according to Bain & Co. For the first time, luxury growth in China – the frontrunner of burgeoning luxury consumption – showed a negative trend, said Bain, due to the government’s anti-corruption drive and changing consumption patterns. It is no coincidence that some of the more ubiquitous brands like Gucci, Louis Vuitton and Hermès saw sales growth slow last year. Slower, steady growth will be the “new normal” this year, and even ultra-wealthy consumers are on the hunt for ever-greater value for money.
Royce Pinkwater, Founder and CEO, Pinkwater Select
The luxury residential property market was divergent in 2014. Whereas London saw a cool down in 2014, New York, Miami and LA all set new records for amounts sold at historic levels.
The markets in 2015 are expected to rise, but at a slower rate. A lot of property product is coming to market in 2015 and buyers with cooler heads will have more choices and more time in which to make up their minds. Luxury developers, in order to be as successful as they hope with their projects, have to differentiate their offerings more powerfully.
Uniqueness and value will be looked for. Tall condo towers were the place for the ultra-high net worth (UHNW) to put money in 2014, but this year buyers are likely to look for something more “homey”, personal and unique. Quality product must come in smaller packages and be more affordable: not every buyer wants 6,000 square feet and wants to spend US$35 million and up. Smaller units in high quality buildings are needed.