Double-Digit Price Gains Seen In 2012: Top International Cities Include Miami, Dubai, and London
A new Global Cities Report by a London-based real estate firm shows that fifteen of the 26 cities which were tracked by the Prime Global Cities Index (58 percent) had recorded either flat or positive price growth in the year to September. However, over the last quarter, 20 out of the 26 cities (77 percent) have seen either flat or positive growth which indicates significant improvements on the scene.
The index currently stands 18.7 percent above its financial low in the second quarter of 2009 with Hong Kong, London, and Beijing being among the strongest markets in recent times with noted price gains of 52.9 percent, 45.4 percent, and 39.5 percent respectively.
Jakarta, Dubai, Miami, Nairobi, and London are among the five cities which recorded double-digit price gains in the year to September which marks at least one key city from each of the five key world regions today.
Highlight for the third quarter of 2012 include:
• The index increased by 1.1 percent in the three months to September.
• Prime prices within the 26 cities increased by 3 percent in the twelve months to September.
• The weakest performers noted in the report include cities in Europe where a decline of 0.5 percent on average was recorded over the last twelve months.
• The strongest performer was Jakarta which was up by 28.5 percent.
• Strong-performing asset classes and economic uncertainty are making the demand for luxury bricks and mortar much stronger now.
While Asian cities are ahead of the rest, the quarterly results suggest that the demand for luxury home properties is not necessarily linked to the overall strength of regional economies as the demand seems to be more closely linked to the flow of international wealth alongside the attitudes of high-net-worth individuals.
In the case of Dubai, Miami, Nairobi, and London, high-net-worth individuals still see these major cities to be ideal investment hubs. Middle Eastern and North African real estate buyers consider Dubai to be the safe option while Venezuelans and Brazilians consider Miami to be their best bet.
However, it seems as if not all prime residential markets are seeing the benefits of the on-going economic uncertainty. While prices in Paris were steady during the third quarter of the year, sales activity fell short as buyers opted to wait and see how the market would unfold.
Prime markets within Asia seem to be stepping into a period of moderate growth due to the regulatory measures which are set to cool prices and improve affordability on a domestic level.