When it comes to luxurious homes, cities like London, New York, and Paris are always in the limelight. How do these iconic capitals stack up in the property market right now? Knight Frank’s latest Prime Global Cities Index provides some clues.
London’s Prime Properties: The Current State
London has seen a slight dip in its prime property prices, which are down by 1.7% since last year. However, interestingly, it’s still ahead of New York in this respect.
The Big Apple’s Dip
Across the pond in New York, the average prices for upscale houses have dipped by a more significant 4% since 2022. Despite their global reputation, both London and New York find themselves near the bottom of the league of 46 prominent cities, occupying the 35th and 42nd spots respectively.
Paris’s Potential Olympic Boost
The French capital, Paris, with its romantic allure, has an exciting event on the horizon. It’s set to host the 2024 Olympic Summer Games, which many believe could provide a temporary lift to its property market.
Factors Impacting London’s Prices
Property market experts, Knight Frank, share their opinions on why London’s prime property prices might be witnessing this dip. They cite rising interest rates and the broader political and economic uncertainties as primary contributors. There are also apprehensions in the London luxury property market, especially among overseas buyers. The potential changes to the non-dom tax system and the recent hike in stamp duty have made investors more circumspect.
Asia’s Meteoric Rise
In contrast to the subdued performance of London and New York, Asian markets are making significant strides in the prime property sector. Manila, the capital of the Philippines, leads the chart for 2023 Q3, boasting an impressive 21.2% increase in prime property prices from last year. Ultra-high net worth individuals, both local and international, seem drawn to Manila’s luxury homes. Close on its heels is Shanghai, which saw luxury property prices grow by 10.4%.
Other Global Players
Shifting our focus to other parts of the world, Dubai, which once occupied the top spot, has now moved to second place with an annual growth rate of 15.9%. Tokyo, despite its strong performance last quarter, has experienced a drop in prices by 12%, pushing it down to 29th place in the rankings.
On average, prime property prices have grown by 2.1% across the 46 major cities globally.
What the Future Holds
Liam Bailey, Knight Frank’s global head of research, opines that while this uptick in average annual house price growth is a positive sign for prime market homeowners, it’s essential to remain realistic. The era of skyrocketing asset prices might be taking a backseat due to increasing rates. For investors, this means they’ll need to be more discerning and strategic to spot the right investment opportunities and achieve their desired returns.