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Jakarta, Bangkok and Miami top global prime property growth

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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%, according to Knight Frank’s

Prime Global Cities Index.

Kate Everett-Allen, Head of International Residential Research at Knight Frank, a said 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.

Eight cities recorded double-digit price growth in the year to March.

Jakarta, Bangkok and Miami topped the index this quarter, recording annual price growth of 38.1%, 26.1% and 21.1% respectively.

Sydney was the only Australian city to feature on the list, with a 0.8% increase in the first quarter of 2013.

Measures directed at waning residential price growth in Jakarta and Bangkok have been less stringent than those in place in neighbouring Asian cities, allowing new middle class wealth to fuel demand and push prime prices higher.

Latin American wealth is a key driver of Miami’s luxury market, with capital flow from Brazil, Venezuela and Argentina proving influential.

Cities in Asia, North America and the Middle East continue to dominate the top half of the index, while seven of the bottom ten rankings are occupied by European cities.

Cities in the Middle East recorded the highest average annual price growth of 11%, while European cities were the weakest performing with prime prices falling on average by 2.3%.

However, the European cities of St Petersburg and Monaco featured solid growth, with the price of luxury homes in Monaco increasing by 10% in the first quarter of 2013 as international interest swelled and the supply of apartments, particularly above €10 million, proved limited.

Tokyo was recorded as the weakest-performing city in the year to March 2012, with a 17.9% fall in prime prices. However, the Bank of Japan has announced major monetary-easing measures after 15 years of deflation. As a result, business sentiment and demand for prime property is strengthening.

Ms Everett-Allen said the governments of China, Hong Kong, Malaysia and Singapore face the opposite challenge to Japan – 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,” she said.

“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.

“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.”

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Article originally posted at: https://theurbandeveloper.com/articles/jakarta-bangkok-and-miami-top-global-prime-property-growth