Imagining the Next 100 Years in Business, Science, and Investing
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    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,516,817 (-0.06%)       Melbourne $971,359 (-1.00%)       Brisbane $819,969 (+2.77%)       Adelaide $731,547 (+1.72%)       Perth $621,459 (+0.34%)       Hobart $751,359 (-0.46%)       Darwin $633,554 (-4.02%)       Canberra $1,005,229 (+2.77%)       National $966,406 (+0.40%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $700,089 (-0.30%)       Melbourne $470,277 (-0.26%)       Brisbane $404,718 (+2.58%)       Adelaide $332,602 (+1.44%)       Perth $348,181 (-0.09%)       Hobart $551,005 (+2.68%)       Darwin $355,689 (-3.55%)       Canberra $477,440 (+4.12%)       National $484,891 (+0.89%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 8,451 (-507)       Melbourne 12,654 (-279)       Brisbane 9,158 (+847)       Adelaide 2,765 (-40)       Perth 9,974 (+39)       Hobart 595 (+36)       Darwin 247 (-1)       Canberra 666 (-49)       National 44,510 (+46)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,895 (+164)       Melbourne 8,149 (-24)       Brisbane 2,260 (+33)       Adelaide 649 (+5)       Perth 2,489 (-21)       Hobart 101 (-3)           Canberra 430 (+13)       National 23,351 (+167)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $630 $0       Melbourne $470 $0       Brisbane $460 ($0)       Adelaide $495 (+$5)       Perth $500 ($0)       Hobart $550 $0       Darwin $600 ($0)       Canberra $700 ($0)       National $562 (+$)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $540 (+$10)       Melbourne $410 (+$2)       Brisbane $460 (+$10)       Adelaide $380 $0       Perth $440 (-$10)       Hobart $450 $0       Darwin $500 ($0)       Canberra $550 $0       National $473 (+$2)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,470 (-50)       Melbourne 7,404 (-70)       Brisbane 1,986 (-122)       Adelaide 875 (-29)       Perth 1,838 (-38)       Hobart 254 (+18)       Darwin 70 (-3)       Canberra 388 (+17)       National 18,285 (-277)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 10,652 (+58)       Melbourne 9,001 (-180)       Brisbane 1,567Brisbane 1,679 (-62)       Adelaide 403 (+4)       Perth 1,050 (-21)       Hobart 87 (+1)       Darwin 131 (-10)       Canberra 453 (+43)       National 23,344 (-167)                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.16% (↑)      Melbourne 2.52% (↑)        Brisbane 2.92% (↓)       Adelaide 3.52% (↓)       Perth 4.18% (↓)     Hobart 3.81% (↑)      Darwin 4.92% (↑)        Canberra 3.62% (↓)       National 3.03% (↓)            UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 4.01% (↑)      Melbourne 4.53% (↑)        Brisbane 5.91% (↓)       Adelaide 5.94% (↓)       Perth 6.57% (↓)       Hobart 4.25% (↓)     Darwin 7.31% (↑)        Canberra 5.99% (↓)       National 5.07% (↓)            HOUSE RENTAL VACANCY RATES AND TREND         Sydney 1.5% (↓)       Melbourne 1.9% (↓)       Brisbane 0.6% (↓)       Adelaide 0.5% (↓)       Perth 1.0% (↓)     Hobart 0.8% (↑)        Darwin 0.9% (↓)       Canberra 0.6% (↓)     National 1.2%        National 1.2% (↓)            UNIT RENTAL VACANCY RATES AND TREND         Sydney 2.3%ey 2.4% (↓)       Melbourne 3.0% (↓)       Brisbane 1.3% (↓)       Adelaide 0.7% (↓)     Perth 1.3% (↑)        Hobart 1.2% (↓)     Darwin 1.1% (↑)        Canberra 1.6% (↓)     National 2.1%       National 2.1% (↓)            AVERAGE DAYS TO SELL HOUSES AND TREND         Sydney 31.2 (↓)       Melbourne 30.9 (↓)       Brisbane 35.7 (↓)       Adelaide 27.6 (↓)       Perth 40.5 (↓)       Hobart 30.2 (↓)       Darwin 27.1 (↓)     Canberra 28.1 (↑)        National 31.4 (↓)            AVERAGE DAYS TO SELL UNITS AND TREND         Sydney 33.7 (↓)       Melbourne 32.6 (↓)       Brisbane 34.8 (↓)       Adelaide 29.5 (↓)       Perth 46.6 (↓)       Hobart 27.4 (↓)       Darwin 38.2 (↓)       Canberra 30.2 (↓)       National 34.1 (↓)           
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Imagining the Next 100 Years in Business, Science, and Investing

How should investors think about the century ahead?

By Lauren R. Rublin
Mon, May 10, 2021Grey Clock 12 min

A hundred years ago, when Clarence Barron founded Barron’s, it was impossible to imagine the world we inhabit today. The birth of television was six years in the future. Computers, smartphones, the internet, the Dow Jones industrials at 34,000—all would have seemed preposterous to Clarence and his contemporaries.

Imagining the next 100 years might also seem preposterous. Yet, that’s the challenge Barron’s put before three investment experts at our recent centennial roundtable. The group included Karen Karniol-Tambour, co-chief investment officer for sustainability at Bridgewater Associates; Tom Slater, head of U.S. equities and portfolio manager of U.S. equity and long-term global growth funds at Baillie Gifford; and Jerry Yang, founding partner of AME Cloud Ventures and co-founder of Yahoo!

How should investors think about the next 100 years? How should they prepare for the next five or 10? Here’s an edited version of our centennial conversation.

Barron’s: A hundred years ago, the world had just emerged from a pandemic and the Roaring ’20s had begun. History seems to be repeating, so let’s start with the immediate future. What are the most disruptive and long-lasting changes likely to come out of the Covid-19 pandemic?

Jerry Yang: First, happy 100 to Barron’s! The past 15 months sped up the digital revolution we’ve been talking about for a decade and a half, whether it’s contactless transactions, or running your life through Zoom, or more mission-critical things like virtual doctor’s appointments and schooling and working from home. These changes are here to stay.

Tom Slater: There are also things we won’t go back to doing. It isn’t an intrinsic part of human nature that you host all of your enterprise information technology yourself in your own warehouse [as a result, the cloud has continued to grow]. That’s just a product of accumulated accidents. Distributed working has changed people’s attitudes toward that. Similarly, something like selling television advertising, which historically has been done at the “up-fronts” in New York at the start of the year, with no knowledge of which shows are going to be most popular, is going to change. We will move to a much more data-driven system.

Central banks have implemented fairly radical policies to deal with the economic impact of Covid-19, including zero interest rates. Karen, how long will the monetary authorities let this cycle run?

Karen Karniol-Tambour: Just as the Covid crisis accelerated the shift toward digitization, it also accelerated a shift into a different policy paradigm. Since 1980, policies were aimed at making sure inflation didn’t get out of control. The main tool to fight inflation was interest rates. The Federal Reserve tightened monetary policy by lifting rates whenever inflation popped up. In more recent decades, we’ve experienced big deflationary forces, like globalisation. Interest rates fell lower and lower.

In 2009, as we came out of the financial crisis, the Fed switched to a new policy paradigm. It started printing money. Rates hit zero, and quantitative easing became the main policy tool. Now, the Fed is printing money to allow the government to spend. It is monetising that spending. The shift is likely to be pretty long-lasting—until the excesses get out of control. Central banks have many incentives to let the cycle run. A lot of deflationary forces are behind us, and we’re going to get inflationary forces instead. The one thing pushing in the other direction is automation. The question is to what extent digitalization will be an inflationary force, letting the cycle run for much longer without creating the risk of overheating.

Government has taken a growing role in the economy. How will that play out in coming years?

Karniol-Tambour: Since 1980, there has been a strong prevailing ideology that says government should set the rules of the games and get out of the way, without determining where capital should be invested. That is shifting rapidly, and government now is much more comfortable running fiscal policy in order to achieve specific goals. The shift could run quite some time. Government needs to have goals, whether it’s attacking climate change or competing against China or improving the country’s education system, when it is out there spending a lot of money. This is a very big shift from what we have experienced in the past 50 years.

Time for a lightning round. Yes or no: Will capitalism survive the next 100 years?

Karniol-Tambour: Not in its current form. The idea that the market should do whatever the market wants is dead. Consider issues like environmental degradation and modern slavery. If we let capitalism advance without regard to ethical issues, what kind of world will our grandchildren and great-grandchildren live in? The idea that capitalism will survive without an overlay of societal goals seems unlikely.

Slater: Capitalism will survive, but I agree that in its current form there are challenges. Younger generations are much more interested in the impact their investments are having. We will have to reclaim impact investing from specialists, and it will have to become much more of a mainstream concept. I also think there is real bloat in the financial sector, relative to the rest of the economy. So much of what capitalism has become is trading pieces of paper with other people in finance, and not actually providing risk capital to the real economy and entrepreneurs. The size of the financial sector, relative to the rest of the economy, needs to shrink substantially.

Jerry, what are your thoughts?

Yang: Capitalism is changing, but the marketplace will also try to define winners and losers based on some of the externalities Karen and Tom talked about. Competition has worked really well in entrepreneurial areas, such as start-ups. But the marketplace is much more complex; it is no longer just about profit. As we have seen with the rise of stakeholder capitalism, there are a lot of things to maximize for. I’m looking forward to seeing start-ups adjust to that. We are seeing a lot of great entrepreneurs start to take into account impact as part of their overall goals.

As a venture capitalist, you’re getting a sneak preview of the future. What kinds of innovations are most needed in the next 100 years to sustain the world?

Yang: We may not have 100 years. We may only have a decade or two to ensure the sustainability of the Earth, and do it in a just and equitable way. The amount of energy required to build the world in a sustainable way needs to be double today’s level, and we need to get to net zero [emissions] quickly. The food supply and supply chains for just about everything need to be moving toward much more innovation, much faster, and in a much less impactful way to the environment.

Some say the 20th century was the century of technology, and the 21st will be the century of biology. Tom, do you agree?

Slater: It may well be true. Certain sectors of the economy, such as media and retail, experienced massive transformation due to the impact of technology over the past 20 years. But there are some huge swaths that are much more important to the quality of our lives that have seen relatively little change. Healthcare is one. There has been a lot of cost inflation and relatively few achievements in improving patients’ lives. In the companies in which I’m invested, I see real excitement at the intersection of information technology and healthcare, including the ability to use tools, such as artificial intelligence and big data, to lead to dramatic improvements in outcomes. At the same time, some technologies within the field of biology—gene sequencing and editing are good examples—are on trajectories as good as, if not better, than Moore’s Law.

Yang: Think about how Moore’s Law changed IT, whether it was advances in the size of semiconductors, or process automation, which allowed for high-quality, high-volume, low-defect manufacturing. Not only will we see a similar sort of marriage between technology and healthcare, but also, more specifically, whether it’s drug discovery or new treatments or processes, there will be much more rapid development, more shots on goal, and much more interesting ways of developing industrial manufacturing through biological processes. Not everything we invest in is going to work, but if the kinds of savings and productivity and volume increases we’ve seen in IT are applied to biology, we’re going to see some significant improvements.

What are some other emergent technologies and innovations that excite you?

Karniol-Tambour: We are seeing much greater investor enthusiasm for, and willingness to allocate capital to, innovations that will make a difference in dealing with environmental and social problems. There is a clearer yardstick on environmental than social issues because we can measure emissions, but our social problems are significant. Gross domestic product alone was a good yardstick to measure progress back when Barron’s was founded. Rising GDP was associated with better outcomes across the board. The most recent expansion was probably the first that saw significant divergences: GDP measures looked pretty good; environmental and social ones, a lot less so. I am most enthusiastic about innovations that will make a difference in areas that many investors seem to care about. That’s where they will allocate capital.

Also, it may be beneficial to invest alongside government in areas where it doubles down. You are much more likely to be able to make a return where large players like government are willing to do the foundational work to make sure that industries exist to solve particular problems.

Which of today’s dominant industries will be gone in 100 years?

Karniol-Tambour: The mining of industrial commodities won’t be gone, but will change. To get to net zero, we must get copper and other commodities out of the ground. We need to make electric vehicles, which require these metals. Today, extraction entails pollution, and the mining industry has had issues with slavery and child labor. If investors keep pushing the industry to change, hopefully, it will exist in a very different form in the future.

EVs are already here. What is the future of autonomous vehicles?

Slater: As usual, financial markets show little interest in things happening beyond a 12-month time frame. If you extend the time frame, massive progress is being made. Making autonomous vehicles 99.999% accurate is what matters.

Why stop with cars? What about autonomous planes?

Slater: They don’t have to be passenger aircraft. Jerry and I are both are investors in Zipline, a company that operates autonomous drone-delivery vehicles. They were first used in the medical-supply industry. From there, you could see the space expanding to the transportation of human passengers.

What is the future of robotics?

Slater: One of the most interesting applications of robotics is in healthcare, but there are few large, investible companies. Intuitive Surgical [ticker: ISRG] is one. Its robotic surgery system is able to be more precise than humans, and reduces the strain on human surgeons. The company has achieved a significant market cap [$100 billion] in this area in a way that few others have.

Food production is likely to change significantly in the next 100 years. What lies ahead?

Yang: That’s a nice segue, because robotics plays a huge role in agricultural technology. Think about hydroponics and other sorts of indoor agriculture. Also, we’re using robots to harvest certain crops. Robotics are replacing many traditionally labour-intensive tasks in the industry.

More broadly speaking, if the goal is to build a sustainable food supply for 10 billion people, we will need alternatives to the traditional supply. We’re familiar with plant-based meats. We’re now looking at [laboratory] cultured meats whose production can bypass traditional production methods that consume lots of natural resources. This is a huge area. We are seeing a lot of energy and resources going into start-ups studying how to produce safer, less resource-consuming food.

Let’s dive into the future of money. It seems more than coincidental that Coinbase Global [COIN], the cryptocurrency exchange, came public last month, on the eve of Barron’s centennial. The next 100 years promise enormous changes in our conception of money. How should investors prepare?

Karniol-Tambour: Let’s go back to our first topic—the paradigm shift from inflation-fighting to monetary and fiscal policy working together through money-printing. There are a lot of incentives to monetize the debt. There is a lot of debt in the world, relative to the ability to repay it. It isn’t surprising that, at a time when governments are willing to issue huge amounts of debt and run large fiscal deficits, investors are looking at different ways of storing wealth.

Right now, cryptocurrencies aren’t store-holds of wealth; they are very volatile. But they move us into a world where there is a wider array of store-holds of wealth, and a wider array of ways to pay for things without being encumbered by whatever monetary system central banks have established. In the next 10, 20, 30 years, investors are going to get a lot more diversified in the assets they hold. Gold will still have a role, because you wouldn’t want to have all your eggs in one basket, and gold is the oldest store-hold of wealth. But investors will want to think about money in more fungible ways. Many people are asking, how do I store wealth if I’m worried that inflation is coming? You want a wider array of ways to deal with that.

Tom, should crypto be a part of an investment portfolio?

Slater: Crypto doesn’t have an internal rate of return. There are no fundamentals to predict, so it is in some ways dangerous to call it investing. But there are some interesting businesses doing things in the crypto space, and they are increasingly achieving a scale that is investible. It would be wrong to write off an area where there is so much talent and focus from venture capitalists, and some potential efficiency gains for the financial system.

Jerry, what do you see ahead for cryptocurrencies and payments?

Yang: The ability for people to transact with other kinds of currencies is probably accelerating. But there is a speculative aspect to it. To Tom’s point, as blockchain-based technologies and ecosystems are built up, real value potentially is being created. Whether things are priced correctly today, we can all have our opinions. A lot of coins are being developed to allow people to exchange private records securely or authenticate certain digital assets. There is value associated with those coins and the economies in which they represent transactions. Long term, some may be very successful. I feel you’re better off betting on blockchain cryptocurrencies tied to a real ecosystem, but it’s hard to argue with what Karen said. Bitcoin and other cryptocurrencies are starting to be seen as a hedge against the buildup of debt and potential inflation, so personally, I have a basket of all of them, just in case.

 

That’s the ultimate hedge. So far, we’ve talked about the next 100 years on Earth, but we are likely to become an interplanetary species in the future. Where is space exploration headed?

Yang: Elon Musk has said that humans need to be an multiplanetary species. We got involved in investing in space-tech companies six or seven years ago. There is now a push to leverage the polar ice caps on the moon and build a moon station, and we are exploring Mars. A hundred years from now, we might look back and say that we not only have been able to take some strain off the Earth by expanding into space, but also we’ve been able to use other planets to help humanity sustain itself.

The rise of China is certain to be a key feature of the next 100 years. At some point, China’s economy will be larger than America’s. What does that mean for investors?

Slater: It isn’t the scale of China’s GDP that is most important. It’s the quality of their entrepreneurship. It is the lead that new Chinese companies are taking, and the model of innovation that we have really only seen at scale on the West Coast of the U.S. Today, in China, we are seeing entrepreneurs invest significant amounts of their own capital in their businesses. Companies are emerging from the competitive maelstrom of their domestic market battle-hardened, at a size that domestic companies in any other country struggle to match, and with a determination to pursue long-term goals that is often lacking in some Western companies we look at. It is all of those ingredients that make me excited and optimistic about the investment potential of Chinese companies over the next 15 to 20 years.

Karen, what are the biggest risks and opportunities associated with China’s rise?

Karniol-Tambour: I couldn’t agree more with how Tom phrased it. Many investors are still stuck in the old world of thinking about China as an emerging market, and therefore regarding its growth as catch-up driven. China is a very, very large place: Some elements need to catch up with the rest of the world, but China is also becoming its own innovation ecosystem. It is figuring out how to grow at scale in ways that others haven’t, and with a vibrancy we haven’t really seen outside of the West. Limited investment exposure to China is probably the most significant investment bias we see. There is a significant lack of geographic diversification in portfolios.

It is clear that China will play a very significant role in the world economy in the future, even if we don’t know exactly what it is. Tom talked about Chinese companies, and I’ll mention Chinese bonds. China is the largest economy in the world whose interest rates haven’t hit zero. China isn’t yet following the U.S. policy paradigm, so its fixed-income market represents diversification for investors.

Speaking of investments, the 60/40 portfolio—60% stocks, 40% bonds—was the gold standard for the past 50 years. What is the optimal asset mix for the next 20 or 50?

Karniol-Tambour: A 60/40 portfolio has a few problems. The biggest is, it offers no inflation protection. Both stocks and bonds don’t do well in periods of significant inflation. The portfolio of the future will have more inflation hedges, such as gold, inflation-linked bonds, and direct exposure to commodities. Second, nominal bonds aren’t the same asset class they used to be. The reason to hold them was that, if growth slowed, the central bank would have room to lower interest rates and your bonds would do well. Once rates are at zero, there is only so much room for bonds to act as a diversifier. I wouldn’t be surprised, if we get more yield-curve control policies in coming decades, that bonds become even more useless. Now, they are a lot less useful than they need to be.

Slater: I’ll pick up on Karen’s earlier point about matching your portfolio to the most exciting opportunities. A market index reflects the incumbent pool of profits. But when so much change is occurring across such a variety of areas, being invested in a portfolio matched against the structure of historic profits, as represented by the indexes, is quite dangerous. People need to have more invested in companies that are taking risks and pursuing big and exciting opportunities.

Take SpaceX [Elon Musk’s aerospace manufacturer and space-transportation company]. We don’t know if it is going to be successful, but if it is, the returns and scale that come from that are vast. Over the long run, we have seen that excess investment returns are concentrated in a very small number of exceptional companies. The impact of these extreme outliers is what really matters in stock markets. If you can identify companies with the potential to be outliers, and hang on to them long enough, that return accrues to your portfolio.

Imagine that 100 years have passed. Science has fulfilled its promise and you’re all still here. In fact, you look younger than ever at Barron’s Bicentennial Roundtable, to be held on Pluto. What will we be talking about 100 years from now?

Karniol-Tambour: Impact investing will be synonymous with investing. Almost no one will invest money for any other purpose.

Slater: To answer that question, you have to think about the things that won’t have changed in a 100 years. Fundamental traits of human nature won’t have changed. We will still be gossiping about celebrities. We will still be excited by the newest entrepreneurs and the latest companies. But as for which technologies we will be talking about, I haven’t a clue.

Yang: We’ll probably talk about how bad the food was on the way to Pluto, or which avatar we should use to represent ourselves.

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Private club memberships and luxury cars are some of freebies on the table.

By SHIVANI VORA
Mon, Aug 15, 2022 6 min

When Ryan Wolitzer was looking to buy an apartment in Miami Beach late last year, several beachfront properties caught his eye. All were two-bedroom homes in high-end buildings with amenities aplenty and featured glass walls, high ceilings and an abundance of natural light. But only The Continuum, in the city’s South of Fifth district, came with a gift: a membership to Residence Yacht Club, a private club that offers excursions on luxury yachts ranging from a day in south Florida to a month around the Caribbean. Residents receive heavily discounted charters on upscale boats that have premier finishes and are stocked with top shelf spirits and wine. Mr. Wolitzer, 25, who works for a sports agency, was sold.

“The access to high-end yachts swayed my decision to buy at The Continuum and is an incentive that I take full advantage of,” Mr. Wolitzer said. “It’s huge, especially in my business when I am dealing with high-profile sports players, to be able to give them access to these incredible boats where they experience great service. I know that they’ll be well taken care of.”

Freebies and perks for homeowners such as a private club membership are a mainstay in the world of luxury real estate and intended to entice prospective buyers to sign on the dotted line.

According to Jonathan Miller, the president and chief executive of the real estate appraisal and consulting firm Miller Samuel, they’re primarily a domestic phenomenon.

In the U.S. residential real estate market, gifts are offered by both developers who want to move apartments in their swanky buildings and individuals selling their homes. They range from modest to over-the-top, Mr. Miller said, and are more prevalent when the market is soft.

“When sales lag, freebies increase in a bid to incentivize buyers,” he said. “These days, sales are slowing, and inventory is rising after two years of being the opposite, which suggests that we may see more of them going forward.”

Many of these extras are especially present in South Florida, Mr. Miller said, where the market is normalizing after the unprecedented boom it saw during the pandemic. “The frenzy in South Florida was intense compared with the rest of the country because it became a place where people wanted to live full time,” he said. “Now that the numbers are inching toward pre-pandemic levels, freebies could push wavering buyers over the finish line.”

Kelly Killoren Bensimon, a real estate salesperson for Douglas Elliman in Miami and New York, said that the gifts that she has encountered in her business include everything from yacht access and use of a summer house to magnums of pricey wine. “One person I know of who was selling a US$5 million house in the Hamptons even threw in a free Mercedes 280SL,” she said. “They didn’t want to lower the price but were happy to sweeten the deal.”

A car, an Aston Martin to be exact, is also a lure at Aston Martin Residences in Miami’s Biscayne Bay. Buyers who bought  one of the building’s 01 line apartments—a collection of 47 ocean-facing residences ranging in size from 325 to 362sqm and US$8.3 million to US$9 million in price—had their choice of the DBX Miami Riverwalk Special Edition or the DB11 Miami Riverwalk Special Edition. The DBX is Aston Martin’s first SUV and retails for around US$200,000. It may have helped propel sales given that all the apartments are sold out.

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An Aston Martin came with the sale for some buyers at Aston Martin Residences in Miami’s Biscayne Bay. Aston Martin Residences

The US$59 million triplex penthouse, meanwhile, is still up for grabs, and the buyer will receive a US$3.2 million Aston Martin Vulcan track-only sports car, one of only 24 ever made.

“We want to give homeowners the chance to live the full Aston Martin lifestyle, and owning a beautiful Aston Martin is definitely a highlight of that,” said Alejandro Aljanti, the chief marketing officer for G&G Business Developments, the building’s developer.  “We wanted to include the cars as part of the package for our more exclusive units.”

The US$800,000 furniture budget for buyers of the North Tower condominiums at The Estates at Acqualina in Sunny Isles, Florida, is another recent head-turning perk. The 94 residences sold out last year, according to president of sales Michael Goldstein, and had a starting price of US$6.3 million. “You can pick the furniture ahead of time, and when buyers move in later this year, all they’ll need is a toothbrush,” he said.

Then there’s the US$2 million art collection that was included in the sale of the penthouse residence at the Four Seasons Residences in Miami’s Brickell neighbourhood. The property recently sold for $15.9 million and spans 817sqm feet. Designed by the renowned firm ODP Architects, it features contemporary paintings and sculpture pieces from notable names such as the American conceptual artist Bill Beckley and the sculptor Tom Brewitz.

But it’s hard to top the millions of dollars of extras that were attached to the asking price in 2019 of the US$85 million 1393sqm  duplex at the Atelier, in Manhattan’s Hell’s Kitchen neighbourhood. The list included two Rolls-Royce Phantoms, a Lamborghini Aventador, a US$1 million yacht with five years of docking fees, a summer stay at a Hamptons mansion, weekly dinners for two at lavish French restaurant Daniel and a live-in butler and private chef for a year. And the most outrageous of all: a flight for two to space.

It turned out that the so-called duplex was actually a collection of several apartments and a listing that went unsold. It did, however, generate plenty of buzz among the press and in real estate circles and was a marketing success, according to Mr. Miller.

“A listing like this that almost seems unbelievable with all the gifts will get plenty of eyeballs but is unlikely to push sales,” he said. “Empirically, it’s not an effective tactic.”

On the other hand, Mr. Miller said that more reasonable but still generous freebies, such as the membership to a yacht club, have the potential to push undecided buyers to go for the sale. “A nice but not too lavish gift won’t be the singular thing toward their decision but can be a big factor,” he said. “It’s a feel-good incentive that buyers think they’re getting without an extra cost.”

Examples of these bonuses include a membership to the 1 Hotel South Beach private beach club that buyers receive with the purchase of a residence at Baccarat Residences Brickell, or the one-year membership to the Grand Bay Beach Club in Key Biscayne for those who spring for a home at Casa Bella Residences by B&B Italia, located in downtown Miami and a residential project from the namesake renowned Italian furniture brand. The price of a membership at the Grand Bay Beach Club is usually a US$19,500 initiation fee and US$415 in monthly dues.


The Grand Salon at at Baccarat Residences Brickell in Miami.
Baccarat Residences

Still enticing but less expensive perks include the two-hour cruise around New York on a wooden Hemmingway boat, valued at US$1,900, for buyers at Quay Tower, at Brooklyn Bridge Park in New York City. The building’s developer, Robert Levine, said that he started offering the boat trip in July to help sell the remaining units. “We’re close to 70% sold, but, of course, I want everything to go,” he said.

There’s also the US$1,635 Avalon throw blanket from Hermes for those who close on a unit at Ten30 South Beach, a 33-unit boutique condominium; in Manhattan’s Financial District, a custom piece of art from the acclaimed artist James Perkins is gifted to buyers at Jolie, a 42-story building on Greenwich Street. Perkins said the value of the piece depends on the home purchase price, but the minimum is US$4,000. “The higher end homes get a more sizable work,” he said.

When gifts are part of a total real estate package, the sale can become emotional and personal, according to Chad Carroll, a real estate agent with Compass in South Florida and the founder of The Carroll Group. “If the freebie appeals to the buyer, the transaction takes on a different dynamic,” he said. “A gift becomes the kicker that they love the idea of having.”

Speaking from his own experience, Mr. Carroll said that sellers can also have an emotional connection to the exchange. “I was selling my house in Golden Isles last year for US$5.4 million and included my jet ski and paddle boards,” he said. “The buyers were a family with young kids and absolutely loved the water toys.” Mr. Carroll could have held out for a higher bidder, he said, but decided to accept their offer. “I liked them and wanted them to create the same happy memories in the home that I did,” he said.

The family moved in a few months later.