The luxury‑home market in the United States is contracting sharply, while several offshore jurisdictions are experiencing a surge in high‑net‑worth (HN‑W) buyer activity.
U.S. luxury‑home sales slump
- Overall decline: Luxury‑home sales have fallen 45 % year‑over‑year, according to Redfin, which defines luxury homes as the top 5 % by value.
- Non‑luxury segment: Sales of non‑luxury homes are also down, but only 38 %.
- Regional hotspots:
- Miami – sales down 69 %
- Long Island, Nassau and Suffolk counties – down 63 %
- California’s most expensive markets – large losses (exact percentages not given)
Redfin attributes the downturn to higher mortgage rates and broader economic weakness, including stock‑market volatility that affects even buyers who do not use mortgages.
Shifting migration patterns of HN‑W individuals
- Historically, many wealthy buyers in Miami came from South America (Colombia, Venezuela). Recent data show a decline in new arrivals from these regions.
- Mexican high‑net‑worth clients, who previously considered U.S. relocation, are now looking toward Canada, Portugal, Ireland, or Italy to reduce tax exposure.
- A growing share of HN‑W individuals are moving away from the United States and other high‑tax Western nations. Primary destinations include:
- Switzerland
- Singapore
- United Arab Emirates (UAE) – especially Dubai
- Australia (still attracting some influx despite restrictive immigration)
Dubai’s real‑estate boom
- Tourism‑ and visa‑reform‑driven growth is projected to keep Dubai’s property market on an upward trajectory throughout 2023.
- Luxury units in Dubai are described as “quick sells,” with time on market decreasing while prices continue to rise.
- Recent reports note a 43 % surge in real‑estate deals driven by high investor demand.
- Property values in Dubai have doubled in many cases since the summer of 2021.
Visa and tax incentives driving demand
- The UAE now offers a 10‑year “Golden Visa” to foreign buyers who purchase residential property, providing long‑term residency without the restrictive conditions of U.S. investor visas (e.g., EB‑5).
- In contrast, U.S. investor green‑card programs are described as “notoriously slow,” discouraging foreign capital.
- High‑tax jurisdictions (e.g., New York State, New York City, other Northeastern states) impose state and city millionaire taxes, prompting wealthier residents to seek lower‑tax environments.
Comparative outlook for investors
| Factor | United States | Dubai (UAE) |
|---|---|---|
| Luxury‑home price trend (2023) | ‑45 % (sales) | + (prices rising, sales up 43 %) |
| Time on market for luxury units | Increasing | Decreasing (quick sells) |
| Foreign‑investor visa accessibility | EB‑5 slow, restrictive | 10‑year Golden Visa, property‑based |
| Tax burden for HN‑W residents | High federal + state + local taxes | Zero personal income tax; low corporate tax |
| Market volatility | Sensitive to U.S. stock‑market swings | Less directly tied to U.S. market |
Practical considerations for high‑net‑worth buyers
- Tax efficiency: Evaluate jurisdictions offering zero or low personal income tax (e.g., UAE) versus high‑tax U.S. states.
- Residency pathways: Property‑linked visas (Dubai Golden Visa) can provide long‑term residency without the lengthy processing times of U.S. investor programs.
- Market liquidity: Dubai’s luxury market shows faster turnover, which may be advantageous for investors seeking quicker exits.
- Regulatory environment: Consider the stability of visa and property laws; recent reforms in Dubai have been aimed at attracting foreign capital, while the U.S. has tightened foreign‑buyer access in some markets.
Overall, the data indicate a pronounced divergence: U.S. luxury real‑estate activity is contracting amid higher taxes and tighter immigration rules, whereas Dubai and other low‑tax, visa‑friendly jurisdictions are drawing increasing interest from high‑net‑worth individuals seeking both tax relief and market appreciation.
