Saturday, August 20, 2022

Global luxury real estate growth hits decade-low

luxury real estate

Manila saw the highest price growth, followed by Tokyo and Stockholm

High-end housing markets across the globe, beleaguered by the coronavirus pandemic and the accompanying damage to the economy, have reached their lowest rate of annual growth in almost a decade, according to the latest prime cities index from Knight Frank, released Wednesday.

Prices edged up an average of 0.9% in the year to June across the 45 prime residential markets around the world that the estate agency and property consultants analysed. That’s the lowest rate of growth recorded since the end of 2009, during the midst of the global financial crisis.

The high-end homes in Manila, in the Philippines, recorded the highest price growth in the year to June, up 14.4%, according to the report. Tokyo and Stockholm followed, where prices increased 8.6% and 4.4%, respectively.

Bangkok recorded the steepest falls during the same time frame, falling 5.8%.

While the index typically focuses on price performance over a 12-month period, in this case “to gauge the impact of the pandemic, a look at data over the three months to June is most pertinent,” the report said.

For many of the cities included in the index, the height of the coronavirus pandemic played out during the three-month window.

Of the 45 cities analysed, 20 saw prime prices decline in the second quarter: nine were in Europe, seven in Asia, two in Australasia, one in the Middle East and one in Africa, according to Knight Frank.

London saw its high-end prices fall most significantly during the three-month stretch, dropping 3.7%. Zurich followed, where prime prices fell 3.6%.

Of the cities that saw their prime prices tick up in the second quarter, Cape Town, South Africa, and Vancouver, Canada, ranked top, recording gains of 3.7% and 3.2%, respectively.

On a world region basis, prime prices in Australasia and North America were the most resilient in the second quarter, supported by a demand for large, detached and high-value homes, in cities such as Sydney, Vancouver and Los Angeles, the report said.

Looking ahead to the second half of the year, Amsterdam, Lisbon, Seoul and Moscow are forecast to see the strongest prime price growth, according to a separate global prime index from Savills released Wednesday.

Looking forward, although much depends on the economic situation, which is still materializing in a lot of cities, it’s important to remember that this is not a financial crisis as it was in 2008, and we’re not anticipating the falls in values that were seen during that period, Sophie Chick, head of department at Savills World Research, said in the report.

Even further ahead, over the next five years, Lisbon and Amsterdam are expected to remain top performers, “joined by Berlin, Paris, Miami and San Francisco,” Chick said.


The articles are for information purposes only and Invest for Property shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Invest for Property does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply