The demand for $10 million homes increases in Palm Beach and New York.

• In the U.S., the highest number of homes sold for $10 million or more was in New York, with a total of 72 homes sold, according to Knight Frank.
• The largest sale of the quarter was the $150 million deal for Palm Beach's exclusive private island, which was reportedly acquired by Australian infrastructure investor Michael Dorrell.

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Despite a decline in sales of ultra-luxury homes in many parts of the world, sales in New York, Miami, and Palm Beach, Florida, increased in the second quarter, a new report shows.

In the second quarter, the number of homes sold for $10 million or more increased by 44% in Palm Beach, 27% in Miami, and 16% in New York, according to a report from Knight Frank.

In the U.S., New York had the highest sales of $10 million-plus, with a total of 72, according to a report. Miami came in second with 55, followed by Los Angeles with 42 and Palm Beach with 36. However, Los Angeles experienced a 29% decline in $10 million-plus sales due to the new "mansion tax," which adds a 5.5% charge on homes sold for over $10 million, the report stated.

The largest sale of the quarter was the $150 million deal in May for Palm Beach's only private island, reportedly purchased by Australian infrastructure investor Michael Dorrell, according to The Wall Street Journal. Additionally, a historic 3.2-acre estate in Palm Beach sold for $148 million in June, and the penthouse of the Aman New York was sold for $135 million in July in Manhattan.

Despite a decline in demand for luxury properties in several markets in 2021, wealthy buyers are still paying record prices for unique properties, thanks to the rise in financial markets, according to Knight Frank.

"Liam Bailey, global head of research at Knight Frank, stated that the substantial wealth creation has fueled the growth in the global super-prime sales market. He added that the transformation of markets such as Dubai, Palm Beach, and Miami has more than compensated for the slowing experienced by some more mature markets."

The sales of $10 million-plus homes in the 11 top luxury markets tracked by Knight Frank decreased by 4% compared to the previous year, totaling $8.5 billion.

Dubai has experienced a significant increase in ultra-luxury real estate sales, with 85 sales in the second quarter, according to a report. The city's friendly tax and regulatory regimes have attracted the ultra-rich from Russia, China, Europe, and other regions. In 2019, Dubai had only 23 sales over $10 million. However, in the past 12 months, it has had 436 sales. Although sales in the most recent quarter fell slightly from last year and the first quarter, Knight Frank reported.

According to Knight Frank, sales of $10 million-plus homes in London declined by 47% from the previous year due to concerns about higher taxes on the U.K. wealthy.

Despite the fact that ultra-luxury buyers typically purchase their properties with cash, the report predicts that declining interest rates worldwide will aid in sales during the second half, due to falling interest rates.

Since at least 2006, the week following Labor Day in Manhattan saw the strongest number of contracts signed for properties priced over $4 million, with 29 contracts signed last week, according to the Olshan Luxury Market report.

Bailey predicted that as rates decline, total transaction volumes will increase into 2025.