International Property - Vancouver and Sydney Lead Knight Frank’s Prime Global Cities Index

Highlights Q3 2015:

• The index increased by 1.9% in the year to September 2015. 
• Three cities recorded double-digit annual price increases – Vancouver, Sydney and Shanghai. 
• The index now stands 34.1% above its low in Q1 2009 but its annual rate of growth is slowing. 
• Around 73% of cities recorded positive annual price growth in the year to September, two years ago this figure was closer to 91%. 
• Singapore is home to the weakest-performing luxury residential market for the seventh consecutive quarter.

Prime property prices increased by 1.9% in the year to September 2015, according to Knight Frank’s Prime Global Cities Index with Vancouver and Sydney leading the rankings with standout performances. 

The index, which monitors and compares the performance of prime residential prices across key global cities, reports an increase of 20.4% in Vancouver in the year to September 2015. A shortage of supply and strengthening local demand alongside foreign interest are the reasons behind this strong performance. 

Sydney is not far behind with an increase of 13.7%. The weak Australian dollar, an undersupply of new homes and a strong local economy are behind Sydney’s accelerating prices. Shanghai also recorded double-digit annual price growth, up 10.7% in the year. The reversal of strict housing policies and the introduction of new fiscal measures, including tax and interest rate cuts, have fuelled demand in Shanghai. 

However, looking beyond the top rankings, the overall performance of the index is less than robust. The index now stands 34.1% above its low in Q1 2009 but its annual rate of growth is slowing. 

Kate Everett-Allen, Partner, Residential Research at Knight Frank said, “The index’s annual rate of growth has slowed significantly from 7% two years ago to 1.9%.”

73% of cities recorded positive annual price growth in the year to September down from 91% two years ago. Singapore was the weakest performing prime market tracked by the index for the seventh consecutive quarter, but the rate of annual decline has slowed from -15.2% at the end of Q2 to -7.9% this quarter. 

Analysis by world region highlights that Australasia leads the Prime Global Cities Index, with an average annual price growth of 11.6%, followed by North America at 8.5%. Europe has entered positive territory this quarter with an increase of 0.8%. However, performance here varies from an increase of 9.4% in Monaco to -5.1% in Zurich. 

As QE unwinds and a US rate rise draws near, prime assets will remain on the radar of investors and HNWIs. The big question mark surrounds not Greece and the Eurozone but the slowdown in the Chinese economy. Wealth from China will continue to flow into overseas property markets with the UK, US, Canada and Australia being key target destinations. 

Courtesy: Knight Frank

Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank, together with its US alliance partner, Newmark Grubb Knight Frank, operate from over 335 offices, in 52 countries, across six continents and has over 12,000 employees. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com 

For further information, please contact: 

Astrid Etchells, International PR Manager, Knight Frank +44 (0)20 7861 1182

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