Luxury real estate prices dip in NYC as Asia drives global gains: Report

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Luxury home prices in select Asian cities are soaring, bucking a downward trend in more established markets including New York and London.

Prime property prices – defined as the top 5 per cent of the market – fell more than 2 per cent in New York and London in the first quarter compared to the same period a year ago, according to real estate consultancy Knight Frank. Hong Kong and Berlin also posted declines. 

But in Manila, Tokyo and Mumbai, luxury home prices surged, gaining 27 per cent, 13 per cent and 12 per cent, respectively.

Higher borrowing costs and recession fears have hampered some high-end property markets in the US and Europe. But globally, prime real estate prices have bounced back in 2024 amid strong economic growth and demand from investors, posting average annual growth of 4 per cent in the 44 cities analysed in the report.

Housing prices have advanced in Manila, with the overall economy in the Philippines expanding at the strongest rate in South-east Asia. In Tokyo, a weaker yen and lower borrowing costs have boosted demand from foreign investors.

In Mumbai, luxury housing growth has been in line with India’s booming economy, which is expected to become the world’s top contributor to global GDP growth by 2028. 

Knight Frank’s prime property posted zero growth at end 2022, as higher interest rates cooled demand. But now, 78 per cent of markets are seeing annual price rises.

With those recent gains, Knight Frank’s prime property index is inching closer to its long-term annual growth rate of 5.4 per cent.

“Rather than heralding a return to boom conditions, the index indicates that upwards price pressures are stemming from relatively healthy demand, set against continued low supply volumes,” said Mr Liam Bailey, Knight Frank’s global head of research. BLOOMBERG

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