The realities of luxury property investment and why high-end homes don't always equal high returns

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When it comes to the world of real estate, luxury properties hold a certain allure. For many, they symbolise the pinnacle of success, the dream house we drool over in glossy magazines, and the 'I-made-it' moment we all aspire to achieve.

It's no wonder that investors often set their sights on luxury property investment, expecting substantial returns in this glamorous arena. However, the glittering facade of luxury property investment often conceals a stark reality — especially when it comes to freehold properties.

People have wanted to live here for a long time, so prices are already very high. So, unlike new areas where prices can skyrocket, these established places don't leave much room for big price increases. Moreover, high-net-worth buyers usually prefer freehold properties with land, like big houses, over freehold condos. These properties are rare, and it's quite hard to buy them. Because of this, buyers with deeper pockets tend to choose these landed properties over luxury condos. This choice is making the demand for freehold luxury condos to decline.

The exclusive nature of these properties often means that finding the right buyer who can afford such a luxurious lifestyle is a time-consuming and challenging endeavour.One of the significant challenges faced by the luxury property market is its vulnerability to cooling measures imposed by regulatory authorities.

This unique mindset creates a scenario where owners are more concerned about living in their dream homes than maximising profits, making it challenging to predict substantial returns in the future.Affluent buyers nowadays tend to prefer modern, luxury homes. This means older condos are not as popular as they used to be — even if they're big and have lots of space. As such, the idea that bigger means better is changing.

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