According to the latest Prime Global Cities Index released by Knight Frank, the prime residential index across 35 cities worldwide, has been rising for 22 consecutive quarters but the pace of growth has almost halved in the last year with annual growth falling from 5.2% to 2.5%.
Report highlights:
- The index increased by 2.5% in the year to June 2015 but recorded flat growth in the first half of 2015
- In Q2 2015, Vancouver, Miami and Sydney occupy the top three rankings in terms of annual price growth
- Mirroring the period post-Lehman, seven of the top ten performing luxury markets are once again based in Asia or Australasia
- Monaco, Europe’s top-performing city, has seen sales activity increase pushing prices up by 7.9% year-on-year
- The paths of Hong Kong and Singapore have deviated this quarter. Despite Hong Kong’s new cooling measure, luxury prices increased by almost 7% in the year to June. On the other hand, Singapore (down 15% year-on-year) is home to the weakest-performing luxury residential market for the sixth consecutive quarter.
Nicholas Holt, Head of Research for Asia Pacific, says, “Since the Lehman crisis in September 2008, prime Asian residential markets have seen some of the strongest price growth globally. Jakarta, which is seeing its market slow in 2015 on the back of a cooling economy and additional taxes, leads the way with a staggering 174.5% price appreciation over this period.
“Beijing and Shanghai, the political and financial capitals of China, have also seen their prime markets significantly appreciate over this period, with the huge growth in the number of HNWIs’ demand for high-end property. Recent volatility in the Chinese stock market could lead to more capital seeking brick and mortar, providing a boost to demand in Tier-1 Chinese prime residential markets.”