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The National
11 hours ago
- Business
- The National
Why buying an expensive property is a smart long-term investment
Real estate has long been considered one of the most stable and rewarding asset classes globally. Within this realm, high-end properties – those situated in premium locations and built to luxury standards – are increasingly attracting long-term investors. These assets, often associated with prestige and exclusivity, are proving to be more than just lifestyle statements. They offer tangible long-term value, consistent returns and a hedge against volatility. What works for high-end real estate Resilience in market cycles Luxury real estate has shown remarkable resilience through economic cycles. While low and mid-range properties often experience dramatic price swings during downturns, high-end properties tend to hold their value more steadily. This is primarily due to limited supply, the quality of construction, location desirability and increased demand. In times of economic uncertainty, affluent investors gravitate toward tangible, safe-haven assets – making real estate a reliable store of wealth. Capital appreciation Premium properties typically appreciate at a higher rate over the long term compared to standard residential assets. Iconic developments in sought-after areas see strong demand, especially in cities like Dubai where ongoing investment in infrastructure, innovation and stability fuels capital growth. Investors who entered the luxury market five to 10 years ago have seen significant gains. The UAE's progressive foreign direct investment policies – such as 100 per cent foreign ownership and long-term visas – have created a stable, attractive environment for global investors. Combined with strong governance and continuous investment in infrastructure, these reforms drive demand and long-term value growth in the real estate sector. Rental yield and income potential High-end properties can deliver impressive rental yields, especially in markets with strong demand for corporate housing, tourism and short-term rentals. With the rise of digital nomads and remote work, luxury properties that offer lifestyle and convenience are increasingly favoured by tenants willing to pay a premium for quality living experiences. For investors, this translates into stable income streams that offset holding costs. Portfolio diversification Luxury real estate is a key diversification tool in any sophisticated investment portfolio. It is a physical asset, largely uncorrelated to stock market fluctuations or currency devaluation. For wealthy individuals, investing in trophy assets or branded residences helps spread risk across different asset classes while providing long-term capital protection. Legacy value Beyond financial returns, investing in high-end real estate offers intangible benefits, such as lifestyle, status and legacy. Many investors consider luxury properties not only as investments but also as generational assets. The opportunity to pass down a tangible, appreciating asset with emotional and practical utility adds another layer of long-term value. Be mindful of risks Despite these advantages, it's important to approach high-end real estate investment with a well-informed strategy. Here are a few key considerations: Liquidity While stocks and bonds offer liquidity, real estate, particularly high-end properties, is less liquid. Selling can be a lengthy process, especially for specialised or bespoke properties. Therefore, investors should have a long-term outlook and maintain sufficient liquid assets in other parts of their portfolio. However, the UAE is one of the most forward-thinking jurisdictions globally for digital asset-backed property investment. In short, real estate tokenisation improves liquidity by converting properties into fractional digital tokens that can be traded, allowing investors to buy and sell more easily – even during market downturns. It lowers entry barriers, enhances transparency and enables access to secondary markets, helping investors remain flexible and diversified. High entry and maintenance costs Luxury real estate comes with a premium price tag, and that's just the beginning. Maintenance, service charges, furnishings and property management fees can add up. It's essential to factor these costs into your yield and appreciation calculations. However, working with experienced developers and property managers can mitigate many of these risks and purchase prices can absorb multiple of these costs. Over-speculation The luxury segment can sometimes attract speculative buying, leading to inflated prices and slower absorption rates. It's important to assess whether a development offers genuine long-term demand and intrinsic value or is driven primarily by hype. In conclusion, investing in high-end real estate is not a short-term play – it's a strategic decision aimed at wealth preservation, steady growth and lifestyle enhancement. When chosen wisely, luxury properties can outperform many other asset classes, particularly in dynamic, future-focused cities such as Dubai, Abu Dhabi, London or Singapore. Investors must look beyond surface-level opulence and assess the fundamentals – location, developer reputation, architectural excellence and long-term demand. When these align, luxury real estate becomes premium – not just a status symbol but a cornerstone of generational wealth.
Yahoo
25-05-2025
- Business
- Yahoo
5 Ways Wealthy Investors Are Positioning Themselves During 2025's Market Turmoil
Affluent investors, by definition, are good at building wealth. But they're also good at keeping it. This is why average investors often look to the wealthy during times of market turmoil to see what they're doing with their assets. Learn More: Read Next: According to The Wall Street Journal (WSJ), the tariff-induced market selloff may indeed be different from garden-variety corrections in the past, rattling the nerves of wealthy investors and forcing them into playing defense. Some are concerned that the U.S. is no longer the best place to be investing, while others are content to simply wait out the ups and downs of the market until the tariff policy, for better or worse, is more clearly articulated. If you're concerned about the market and looking for some different ways to ride out the recent volatility, check out where some of the richest investors are putting their money in 2025. There's a real fear among the wealthy that the U.S. is losing its famed exceptionalism. Economists from both sides of the political aisle have been sounding the alarm that tariffs effectively act as taxes on American companies and consumers, and other countries stand to gain. Monica DiCenso, head of the global investment opportunities group at JPMorgan's private bank, told WSJ that many of her firm's wealthy investors worry that the U.S. will lose ground to companies in Japan and Europe, and they are worried about their exposure to U.S. stocks. Those economies have trailed the U.S. for decades, but they are rapidly making up ground, and their stock markets are beginning to reflect that. Check Out: In the same vein, foreign currencies are attracting the attention of high-net-worth investors as the American economy remains unsettled. Even after a 2%-plus rally from its three-year low in April 2025, the U.S. dollar still remained in the hole by a whopping 7.47% on a year-to-date (YTD) basis as of May 19. That's a huge downward move for any currency in the developed world, particularly the U.S. dollar. But the drop may not even be over. President Donald Trump is on record saying, 'Our currency is too strong and it's killing us,' so it's not likely there will be any legislative or governmental assistance to prop it higher. In light of this dynamic — and the current state of tariffs and the world economy — some wealthy investors are snapping up foreign currencies in place of the U.S. dollar. Gold is one of the traditional safe havens investors use to avoid the dizzying volatility of the stock market. In 2025, the trend is clearly hot, as gold has made a series of new highs. Even after a 7.4% selloff from its Apr. 22 all-time high of $3,500,05 per ounce, gold is still up over 22% on a YTD basis. Over the past year, gold has jumped over 40%. There's an old expression on Wall Street that the best way to build wealth is to avoid losing it. In uncertain times, many high-net-worth investors tuck away some of the capital in FDIC-insured options like high-yield savings accounts. These accounts typically pay 10 times or more the interest rate of traditional brick-and-mortar bank savings accounts, but they carry the same FDIC insurance of $250,000 per depositor, per account type. They're also completely liquid, allowing investors to withdraw their money at any time if market conditions improve. Long-term investors who are good at picking stocks use market turmoil to their advantage by picking up shares of beaten-down companies at low prices. According to the so-called 'Oracle of Omaha,' billionaire investor Warren Buffett, investors should be greedy when others are fearful, and fearful when others are greedy. During market corrections and bear markets, valuations of even the best companies are often severely reduced. This creates great opportunities for those with investable capital and a long-time horizon. More From GOBankingRates Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why These 10 Used Cars Will Last Longer Than an Average New Vehicle This article originally appeared on 5 Ways Wealthy Investors Are Positioning Themselves During 2025's Market Turmoil Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
