PHOTO: Nairobi city skyline
In the last year, the price of a homes in the prime property market key cities across the world increased by 2.7% on average, the weakest annual growth for almost six years, new index figures show.
Of the 43 cities tracked by the Knight Frank global residential cities index, the strongest year on year rise was in Singapore with growth of 13.1%, followed by Edinburgh up 10.6%, Madrid up 10.1% and San Francisco up 9.5%.
At the other end of the index Vancouver saw prices fall by 11.3% year on year, price were down by 6.3% in Istanbul, Stockholm and Taipei, down 3.8% in Dubai and down 1.4% in Nairobi.
The index report says that growth in Singapore has been driven by the limited availability of prime properties and a strong market outlook in the first half of 2018. Hong Kong and Singapore, Asia’s two premier cities, have traded places in the last year.
Both cities saw cooling measures introduced over the summer months and, although the rate of annual price growth in Hong Kong has already slowed to 5.5%, Singapore may not be far behind with its quarterly growth weakening to 1.7% in the third quarter of 2018.
Europe’s performance is mixed compared with a year ago. Some European cities are still performing strongly such as Edinburgh and Madrid, others have swapped spectacular for steady, including Berlin and Paris, whilst for a few, price growth remains in negative territory, such as London and Dublin, down 2.9% and 1.7%.
In London, prime prices dipped 2.9% in the last year as uncertainty around Brexit continued. The report says that this trend has been exacerbated by a growth in supply as more landlords attempted to sell their property following tax changes.
The index’s headline figure of 2.7% growth conceals significant variations both within continents and even within countries. In Canada for example, Toronto with growth of 8.5% continues to see prime prices rise in its exclusive areas of Rosedale and Yorkville. Vancouver however, sits at the bottom of our rankings as upmarket areas such as West Vancouver have seen a marked slowdown in sales and prices as a result of the raft of measures introduced in February’s Budget.
Auckland is included in the index for the first time. It says that despite a ban on the purchase of existing properties by overseas buyers from July, excluding new homes, prime prices increased 8.5% in the year to September 2018.
Kate Everett-Allen, head of international residential research at Knight Frank, this year marks a watershed for the index. ‘The overall narrative of lower growth, which we predicted in 2017, has materialised. The rate of growth has declined for three consecutive quarters and has now reached its lowest rate since the fourth quarter of 2012,’ she said.
‘A combination of uncertainty surrounding Brexit, rising interest rates across major economies, a tighter regulatory environment and the remnants of high supply in some markets is impinging on price growth,’ she added.