Despite the tumultuous conditions that have taken over the wider property market—from slumping sales to soaring interest rates—a majority of wealthy U.S. residents still consider property to be a safe investment, according to a report by Coldwell Banker Real Estate.
In fact, more than one-third of the 2,000 U.S.-based high-net-worth consumers polled in the survey are even more steadfast in their real estate investments, considering them a safer bet than stocks, bonds, cryptocurrency and pensions.
“While the luxury property market is now trending toward balance, there is still insatiable demand from wealthy buyers looking to [diversify] their portfolios and build long-term wealth through investing in real estate,” Michael Altneu, vice president of Coldwell Banker Global Luxury, said in Monday’s report.
Of the respondents, 46.7% are investing in property to diversify their portfolio and 46.1% are doing so for a long-term investment, the survey found.
While buyers across other segments of the property market may be paralyzed by rising interest rates, high-net-worth buyers are able to explore other funding avenues. More than half of the would-be home buyers polled plan to finance their next home purchase with cash and almost half, or 48.1%, will turn to a private wealth mortgage.
And with so many high-net-worth individuals having their primary home accounted for, buyers are instead turning their attention “to building generational wealth by investing in multiple, often lesser-priced, secondary-plus properties,” the report said.
Indeed, 40% of respondents who are planning on purchasing a home in the future anticipate doing so in the next one to three years, and of those, 72% said that their purchase would either be a second home, a rental property or vacation getaway.