Cape Town, South Africa, offers attractive real-estate deals for the global rich.

Luxury real estate in Cape Town, South Africa, offers attractive real-estate deals for the rich.

With volatility ruling the stock market, it’s no surprise that the rich are seeking diversification in their investments — and they’re turning to bricks and mortar for an alternative.

A report by Wealth-X and Sotheby’s International Realty finds that, globally, the ultra-rich are buying luxury homes to broaden their portfolios.

Confidence in real estate climbing

Using its own residential real-estate index, Wealth-X reveals that confidence in the market hit a new high in the first quarter of 2015, up 3.7% from the fourth quarter of 2014 and 7% on a year-over-year basis.

There are 211,275 ultra-rich individuals (worth at least $30 million) globally, according to Wealth-X, and collectively, they own close to $3 trillion in real estate, equivalent to 10% of their net worth.

Sunshine and good deals

While parts of Europe’s luxury markets sock buyers with high taxes and high prices, there are still areas to consider there and elsewhere, according to the report, which examined properties worth at least $1 million. Madrid, Spain; Cape Town, South Africa and Dubai were all offered as possibilities for deal-hungry investors.

David Friedman, president of Wealth-X, stated in a release that the report shows the importance of luxury real estate for the ultra-rich, noting that it “encapsulates a core part of their identity.” He added that as their wealth increases, so will their tendency to seek investment “fueled by flight to safety from less geopolitically stable geographies.”

For more on luxury real estate, take a peek at some celebrity homes for sale.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.