"I Got a $40 Million Building From My Dad"... $6 Trillion in Real Estate Transferred to Heirs Worldwide

Generation X and Millennials Expected to Inherit $4.6 Trillion in Real Estate
Preemptive Gifting on the Rise Before Formal Inheritance

There are projections that members of Generation X and Millennials around the world, who have wealthy parents, will inherit an astronomical amount of real estate over the next decade.

New York skyline. Pixabay

The Wall Street Journal (WSJ) reported on January 16 (local time), citing a report from real estate brokerage Coldwell Banker Global Luxury, that approximately 1.2 million high-net-worth individuals with a net worth of at least $5 million are expected to pass down more than $38 trillion in assets to their children over the next 10 years.

The proportion of real estate among these assets is particularly significant. According to the report, Generation X and Millennials are estimated to inherit $2.4 trillion worth of homes and land within the United States alone, and a total of $4.6 trillion (approximately 6,787 trillion won) in real estate globally.

WSJ analyzed that "the baby boomer generation and previous generations accumulated an unprecedented amount of wealth over several decades," and that "as this wealth is now being transferred to the next generation, it is having a considerable impact on the luxury real estate market."

As this transfer of assets accelerates, wealthy individuals are increasingly involving their children in inheritance discussions at an earlier stage. WSJ noted that among the uppermost echelons, there is a growing trend of parents purchasing luxury real estate for their children even before the formal inheritance process begins.

In fact, in Manhattan, New York, family funds are playing a larger role in major real estate transactions. Ian Slater, an agent at real estate brokerage Compass, stated, "In the past, it was common for parents to gift apartments worth $3 million to $5 million to children aged 25 to 30, but recently, there are parents buying properties in the $15 million to $30 million range."

On the other hand, large mansions are increasingly becoming a burden for the younger generation, resulting in a surge of such properties on the market. WSJ explained that this is because multi-generational homes, which require significant staffing and maintenance costs, are burdensome for heirs.