THE BIG SPLASH

The Backlash Over New Mortgage Regulations

Real estate industry leaders are outraged over new rules from the Federal Housing Finance Agency (FHFA) that are part of the Biden administration’s mortgage redistribution plan. 

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• Starting from May 1st, borrowers with lower credit ratings and less money for a down payment will qualify for better mortgage rates than those with higher ratings. 

• As a result, those with good credit scores will pay increased fees. This has sparked concerns that the policy will disproportionately impact "responsible" homeowners.

• Some real estate agents and economists warn that "it's really the responsible people who have done the right thing, who have kept their credit in check, they're being hit with yet another fee." 

• Manhattan broker Brian Lewis, known as "America’s Agent," also criticized the new rules, calling them "one more boot on our neck." He argued that while he doesn't think "some of these people who will benefit from this program are not necessarily people who will not pay their loans back," the rules still penalize those who have already faced higher interest rates. 

• Critics argue that lenders should use objective standards to determine creditworthiness and that efforts to eliminate these standards are deeply concerning.

A SCOOP OF LUXURY

Luxury Housing Demand Skyrockets

Luxury real estate demand continues to surge in 2023, despite the supply not keeping up. Even with the ups and downs of financial institutions and governments, high-net-worth consumers still consider real estate a sound investment. 

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• The luxury housing market is currently in the process of adjusting from its overheated state of the last two years, and home prices in certain states, including Florida, Texas, Tennessee, North Carolina, South Carolina, and Georgia, have experienced an uptick.

• Quality of life is a major focus for consumers, as they look for access to top amenities and services, including recreational venues, entertainment, and healthcare centers.

• Furthermore, corporations are migrating to the Sunshine State for its favorable tax climate, and Portugal is one of the hottest markets in Europe, with professionals continuing to move there for work.

• Finally, the international buyer, a cornerstone of the global luxury residential real estate market, continues to re-emerge as the impact from the COVID-19 pandemic subsides, and city centers are experiencing significant growth.

A SCOOP OF LUXURY PROJECTS

The Rise of the Luxury Branded Residences

The branded residential property sector has grown by 150% over the last decade, with more than 700 developments around the world. 

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• Savills predicts the sector will double in size by 2027. Brands including hoteliers and fashion and jewellery houses such as Armani, Roberto Cavalli and Bulgari, as well as car marques Porsche, Bentley and Aston Martin, are all seeking a share of the sector.

• Luxury real estate consultants expect brand names to translate into premiums on high-end property developments, even in competitive markets. But the trend is not without risks. If brands want to add value to residential properties, they will need to offer residents high-end services and amenities, which could result in higher maintenance fees. 

• However, the risk seems to be worth taking, with the sector now offering consumers not only prestigious living space but also the associated kudos of owning property stamped with an internationally recognised brand name.

A SCOOP OF LUXURY PROJECTS

Dolce & Gabbana Launches Real Estate Projects

Italian luxury fashion house Dolce & Gabbana is venturing into the real estate market with three major projects across the Americas, Europe, and Asia. 

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• The brand, headed by Domenico Dolce and Stefano Gabbana, is partnering with companies in the respective regions for two residential projects in Miami and Marbella, and a hotel project in the Maldives. 

• In Miami, Dolce & Gabbana is working with New York-based JDS Development Group, while in Spain, it has partnered with Sierra Blanca Estates. 

• For the Maldives hotel project, the brand is working with property developer Dar Global. Dolce & Gabbana has not released any further information about the projects at this time. 

• This move into real estate follows the creation of its Beauty division in 2022 and the launch of its home collections. The brand is developing lines of accessories, tableware, textiles, and furnishings, which are expected to be used in its new real estate ventures. 

• This diversification into real estate is in line with the trend of luxury brands creating a complete lifestyle universe around their labels.

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