Globally, Luxury Home Prices Declined for the First Time Since the Financial Crisis
Luxury home prices have fallen globally for the first time since the 2008 global financial crisis, according to a report Wednesday from Knight Frank.
Prices dropped by 0.4% in the 12 months to the end of March across the 46 leading luxury markets the real estate firm tracks. Though slight, the slump is a drastic about-face from a peak of 10.1% growth seen in the fourth quarter of 2021 and the first negative reading logged since 2009.
“The slowdown in growth has overwhelmingly been driven by sharply higher interest rates following recent tightening in global monetary policy,” Liam Bailey, Knight Frank’s global head of research, wrote in the report.
“Annual prices are now falling in 16 of the 46 markets tracked. While two-thirds of markets are still seeing positive growth, the large size of price declines in the weakest markets has pulled the overall index negative,” he added.
Dubai, with high-end property price gains of 44% annually, ranked top for appreciation, but is a “substantial outlier,” and “reflects a market undergoing significant structural change,” the report said.
Miami took the second spot with prices jumping 11% annually, the only other city in the report to reach double-digit growth.
Zurich, Berlin and Singapore rounded out the top five, “pointing to the resilience of wealth and, in Berlin’s case, investment hubs,” according to Knight Frank.
At the other end of the index, New Zealand had a strong presence. Wellington saw the most significant price fall with a decline of more than 27%, followed by Auckland and Christchurch, which witnessed prices drop 17% and 15.3%, respectively.
Other under-performers include Stockholm and Vancouver, “reflecting weakness in their broader national markets,” the report said.