According to the latest Prime Global Cities Index released by Knight Frank, the prime residential index across 35 cities increased by 3.9% in the year to March 2015. The performance of luxury residential prices continues to outperform our mainstream market equivalent. However, it’s a mixed picture with previous strong performers such as London slipping back whilst cities such as San Francisco, Vancouver and Sydney climb the rankings.
Report highlights:
• North American cities occupy three of the top four rankings for annual price growth.
• Luxury properties are, on average, 46% more expensive than in Q2 2009 when the index hit its financial crisis low.
• Despite its cooling measures, Hong Kong saw an upturn in annual price growth as tighter mortgage restrictions targeted properties below HK$7m, shifting the focus of some investors from mainstream to luxury residential properties. David Ji, Director, Head of Research & Consultancy, Greater China at Knight Frank says “Luxury residential prices in Hong Kong rose 1.2% during the first four months of the year. They are expected to increase modestly this year, by up to 5% due to their limited supply and continual demand.”
• European luxury homes have, on average, been the weakest performers globally over the last year.
Kate Everett-Allen, International Residential Research at Knight Frank, says, “If we were to omit cities in North America and Australia, the index would have recorded growth of 2.3% instead of 3.9% in the year to March 2015.”