Posted by Leonard Steinberg on June 11th, 2014

For anyone worried that there may not be enough buyers for luxury New York apartments, take a deep breath. The Boston Consulting Group has determined that the number of millionaire households in the US grew by 18% last year from 2012. The total number of millionaire households in the country grew to roughly 7.1 million. While this figure is very impressive, even more impressive is that the number of millionaire households in China rose 82% last year. The ‘millionaire status’ excluded the value of the home in calculating household wealth. The rich are expected to get richer faster than those not yet worth a million dollars.

Wealth held by all segments above $1 million is projected to grow by at least 7.7% per year through 2018. The US had 5.2 million millionaire households in 2010 and 4.9 million millionaire households in 2007. About 44% of the world’s millionaire households live in the USA. With this in mind the focus on the international buyer may be a bit skewered. China has the second most millionaire households, approximately 2.4 million in 2013.  In Japan the number of millionaire households actually fell 20% to 1.2 million. Qatar wins on wealth concentration, with one in six households breaking the million-dollar barrier.

At a REBNY luncheon yesterday, my first as president of URBAN COMPASS, the subject of UBER-expensive apartments arose: if only 50 apartments sold in 2013 for $ 20m+ and there are a little over 1,000 billionaires in the world, who will buy the 200+ $20 million apartments coming to the Manhattan market over the next 2 years? That could signal an over-supply. Then again, you don’t have to be a billionaire to buy a $ 20m apartment:  There are after all 4,754 US households alone worth more than $100 million who can afford to spend $ 20 million on an apartment. Most people assume that those who buy a Bentley are super-rich: most Bentley buyers are actually far from billionaire status……buying a trophy object often leads the world to believe you are a lot richer than you actually are…..