Jakarta, Bangkok and Miami top global cities prime property growth
|Monday, 29 April 2013|
The average price of luxury homes in the world’s key cities fell by 0.4% in the first quarter of 2013 although the annual rate remained positive at 3.6%.
Cities in Asia, North America and the Middle East continue to dominate the top half of the results table while seven of the bottom ten rankings are occupied by European cities, according to Knight Frank’s latest Prime Global Cities Index.
On a regional basis, cities in the Middle East recorded average annual price growth of 11% while Europe was the weakest performing region with prime prices falling on average by 2.3%.
A typical prime property is now worth 21.3% more than it was in the second quarter of 2009 when the Prime Global Cities Index hit its post-Lehman low.
Overall eight cities recorded double digit price growth in the year to March. Jakarta, Bangkok and Miami topped the table this quarter, recording annual price growth of 38.1%, 26.1% and 21.1% respectively.
Knight Frank says that the measures aimed at cooling residential price growth in Jakarta and Bangkok have been less stringent than those applied across many neighbouring Asian cities, allowing new middle class wealth to fuel demand and push prime prices higher.
Cities in Asia, North America and the Middle East continue to dominate the top half of the results table while seven of the bottom ten rankings are occupied by European cities.
In Europe, however, the price of luxury homes in Monaco increased by 10% in the first three months of 2013 as international interest swelled and the supply of apartments, particularly above €10 million, proved limited.
Tokyo, recording a 17.9% fall in prime prices, was the weakest performing city in the year to March 2012. However, after nearly 15 years of deflation, the Bank of Japan has announced radical monetary easing measures, and as a result business sentiment as well as demand for prime property is now strengthening.
Knight Frank points out that unlike Japan, the governments of China, Hong Kong, Malaysia and Singapore face the opposite challenge; trying to restrain growth. ‘Asia’s policy makers are not only introducing more lending restrictions, taxes and regulations, but the strength of these measures has been stepped up in recent months,’ said Kate Everett-Allen, head of international residential research.
‘In each year since 2009, our Prime Global Cities Index, has repeatedly recorded its weakest rate of growth in the first quarter of the year,’ she explained.
‘As a result, we expect stronger growth to emerge in the second quarter as buyers continue to search for luxury bricks and mortar as a way of sheltering their assets from the Eurozone’s continuing turmoil and the fragile global economy,’ she added.
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