The household disposable income in the UK increased by almost 4% from the fourth quarter of 2014 to the first quarter of 2015. In the US, it rose by almost 2.5% from 2013 to 2014.
Developing countries like India and China are also expected to see rapid development and increases in disposable income. According to the Ministry of Statistics and Program Implementation, India’s total disposable personal income in 2014 grew by 5.72% from 2013.
On top of higher disposable income, there has also been growth in the number of ultra-high net worth individuals (UHNWI)—individuals whose investable assets, excluding personal assets, property and collectibles, is at least US $30 million.
In 2014 the number of UHNWIs was 211,275, and their owned residential real estate assets have grown by 8% from 2013.
The real estate industry is seeing similar growth: In 2014, the total investment in global real estate deals was $771 billion, bringing the total value of global real estate to $13.6 trillion—a 4% increase from its 2013 value.
All this extra money floating around has been a boon for the global luxury furniture market (all these new buildings are hardly standing empty, after all).
The market is expected to grow by $4.78 billion by 2019, hitting a total market value of $26.02 billion.
Global luxury furniture market vs global furniture market 2014
Source: Technavio, 2015
Top countries driving sales of luxury furniture
US
As we mentioned above, disposable income has risen in the US, and a high number of UHNWIs has made the country a key one in the luxury furniture market.
New home sales in the US increased by 26.12% from 2013 to 2014, and the commercial real estate industry contributed $500 billion to the US economy in 2014. The country also has the highest number of billionaires in the world (536 in 2015).
All these factors come together to make the US an attractive destination for the purveyors of fine furniture.
Germany
Germany is one of the major exporters of furniture, and it holds huge potential for luxury furniture manufacturers. Investment in residential real estate topped $1 billion in 2014 and the country saw 2.3% growth in the number of high net worth individuals from 2013 to 2014.
China
China is a booming area for the luxury furniture market. In 2014, the value of real estate in China grew by 21%, and the number of UHNWIs increased by 3.7%.
Additionally, a lot of growth can be attributed to the availability of raw materials and cheap labor for the production of furniture in the country, meaning key market vendors will have their eye on China through the forecast period.
