Luxury residential property remains a favourite asset with investors who have shifted their attention to North America over the last year. Four American cities rank among the highest performers, all recording double-digit growth, confirming the continent’s strong appeal as an investment destination.
The latest Prime Global Cities Index published by Knight Frank looks at luxury property prices in 32 of the world’s cities. The Index reports an increase of 6.2 per cent globally in the year to June 2014, the best annual performance since 2008. In terms of quarterly results, prices rose in the second quarter in a total of 27 cities, up from 21 cities in the previous quarter, confirming a general upturn in this sector of the property market.
For Knight Frank, this shows the strength and appeal of prime property as an investment asset at a time when several countries such as the US and UK are starting to withdraw the various stimulus measures introduced during the recession.
Heading the rankings were Jakarta and Dublin with yearly price increases in luxury property of 27.3 and 23.5 per cent respectively, although their quarterly growth was less strong. However, the American continent stands out as the best performer with a 14.5 per cent rise, well over twice the global average and more than four times Europe’s relatively low 3.5 per cent.
American cities dominate the top ten rankings in year-on-year rises. New York stands in third place registering an 18.4 per cent increase in prime property with Los Angeles and Miami close behind recording price rises of 17.8 and 17.2 per cent. Completing the American quartet is San Francisco where annual price increases in luxury property currently stand at 12.5 per cent. Miami also ranks as one of the best performers over the last six months with an increase of 12.3 per cent in prime property in the area.
At the other end of the spectrum, many European cities showed considerably lower rises. In the case of Moscow, growth was negligible in the year to June 2014 and cities such as Zurich, Paris and Geneva all experienced price drops. In Asia, the falls in prime property prices in Hong Kong and Singapore were particularly sharp, confirming a shift in investor interest away from this part of the world.
Source: Knight Frank