The Prime Global Cities Index from Knight Frank, which tracks the price performance of 32 luxury residential markets, now includes two new cities, Delhi and Bengaluru.
Closer analysis shows the first quarter of the year has seen the slowest rate of growth since the third quarter of 2012.
Despite the slower quarterly rate of growth, the Prime Global Cities Index rose by 6.1% on an annual basis, up from 4.8% a year ago suggesting the overall trend for luxury prices continues to follow an upward trajectory.
Jakarta tops the rankings with quarterly price growth of 10.8% but Dublin saw the second highest rate of quarterly growth, with prime prices ending the first quarter 5.6% higher. The index report says that last year marked a turning point for Dublin’s upmarket residential areas such as Dalkey and Ballsbridge. Since then luxury prices have risen around 24% but prices remain 35 to 45% below their pre-crisis peak.
It also shows that sales volumes dipped in Mainland China in the first quarter, partly due to the traditional low season but also due to tighter credit conditions.
Luxury prices are falling as buyers in Singapore are adopting a wait and see approach, allowing cooling measures to take effect and prices to correct before purchasing. Luxury prices are also falling in Hong Kong due to cooling measures.
Knight Frank says that Cape Town is one market to watch in 2014 as the weaker Rand is attracting buyers from Europe and elsewhere in Africa, including wealthy Nigerians. Activity is strong on the Atlantic Seaboard and limited stock below ZAR5 million is expected to lead to stronger price growth.
Overall the report points out that the first quarter, for many European and US cities, corresponds to the winter months where sales activity is sluggish and price movements slower. In much of Asia it also marks a traditional low season as Chinese New Year sees sales activity decline.
In addition, tax changes often take effect at the end of December leading to a spike in sales in the fourth quarter as buyers and vendors look to take advantage of lower rates.
