Jakarta, Dubai*, Miami, Nairobi and London record double digit growth in the year to September
The latest Knight Frank Prime Global Cities Index finds economic uncertainty continuing to push the price of luxury bricks and mortar higher.
London, UK (PRWEB UK) 2 November 2012
Key findings in Prime Global Cities Index for Q3 2012
- The index rose by 1.1% in the three months to September, down from 1.4% last quarter
Fifteen of the 26 cities tracked by the Prime Global Cities Index (58%) recorded flat or positive price growth in the year to September, but over the last quarter 20 of the 26 cities (77%) have seen flat or positive growth – indicating an improving scenario.
The index now stands 18.7% above its financial crisis low in Q2 2009 with Hong Kong, London and Beijing having been the strongest performers over this period, recording price growth of 52.9%, 45.4% and 39.5% respectively.
Five cities recorded double-digit price growth in the year to September; Jakarta, Dubai*, Miami, Nairobi and London – a city from each of the five key world regions.
Although Asia heads the pack – Jakarta recorded 28.5% annual growth – the results this quarter suggest that demand for luxury homes is only loosely linked to the strength of regional economies (Asia Pacific has only two cities in the top ten compared to Europe's three). Instead, the flow of international wealth and the attitudes of HNWIs are increasingly influential.
Cities such as Dubai, Miami, Nairobi and London are increasingly considered investment hubs for HNWIs in their wider regions. In the wake of the Arab Spring, Dubai has been seen as a relative safe haven for MENA buyers while Venezuelan and Brazilian investors have looked to Miami to limit their exposure to domestic political and economic volatility.
Not all prime residential markets are benefitting from the global economic uncertainty. In Paris, although prices held firm in the third quarter, sales activity was muted as buyers of all nationalities adopted a “wait and see” attitude. Vendors are unwilling to reduce prices until there is greater clarity from President Hollande and the Eurozone leaders in relation to the debt crisis.
Asia's prime markets look to be entering a period of more moderate growth due in part to the regulatory measures aimed at cooling prices and improving domestic affordability.
James Price of Knight Frank's International Residential Development team says: “Aside from London, it would appear the other strong performers are either those established international markets that experienced a lull but are now ‘kicking on' again (e.g. Miami, Dubai) or those that could be described as second tier international cities – strong established markets, but not global ‘gateway' cities (e.g. Zurich, Vienna, San Francisco), where interest has driven price rises from a lower base.”
James continues: “While some of the more traditional prime second-home markets are recording negative movement, this should not disguise their long-term popularity and strength, instead it suggests a cooling from previous higher levels.”
For further information, please contact:
Bronya Heaver International PR Manager, +44 (0)20 7861 1513
Kate Everett-Allen International Residential Research +44(0)20 7861 1513
Notes to Editors
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Knight Frank, operate from 207 offices, in 43 countries, across six continents. More than 6,340 professionals handle in excess of US$886 billion (£594 billion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit http://www.knightfrank.com.
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