Prices for prime residential property in the world's biggest metro markets climbed by only 0.2 percent in the three months to the end of September 2014, according to a new Knight Frank analysis, and by 4 percent over a 12-month period.
This mild pace of price rise is due in part to the fact that the third quarter is dominated by the summer holiday season in much of the world, which often results in fewer sales activity, decreasing pricing pressure. qatar real estate
The prospect of tightening monetary policy in the US, the approaching General Election in the UK (including ongoing discussions of a Mansion Tax), the persistence of cooling measures in key Asian cities, and perhaps most importantly, a new set of negative economic indicators emanating from Europe are all likely contributory factors.
Global Luxury Home Market Statistics for the Third Quarter of 2014
In the third quarter of 2014, the index rose by 0.2 percent, the lowest gain in two years.
Over a 12-month period, prime home prices increased by 4%, down from 6.6 percent a year ago.
Tokyo had the highest quarterly price rise, while Jakarta had the highest annual price rise.
In annual terms, luxury residences in North American cities climbed by 10.5 percent on average, whereas luxury residences in European cities climbed by 1 percent on average.
The prime index is now 36.3 percent higher than its bottom in Q2 2009, but Knight Frank's mainstream global index is only 14.3 percent higher.
Luxury prices continue to exceed their mainstream equivalents, notwithstanding the prime index's lackluster performance in the third quarter. The average price of a luxury home on Knight Frank's index is now 36% more than it was in the second quarter of 2009, while the average price of a mainstream house has climbed by 14% in the same time period.
Although Jakarta is at the top of the rankings, with prices up 27% in the year to June (latest data), the city has seen a severe reduction in price growth, with prices growing only 2.5 percent in the first half of the year.
The rate of increase in luxury prices in Dubai has slowed. This is due in part to seasonal considerations such as Ramadan, which resulted in lower buyer activity, as well as the UAE Central Bank's mortgage cap, which is tighter for individuals purchasing houses worth more than AED 5 million.
"Analyzing the data on a quarterly basis, Tokyo and Cape Town were the strongest performers, with prices completing the three month period 9.2 percent and 6.3 percent higher respectively," said Kate Everett-Allen, partner and head of residential research at Knight Frank.
In terms of annual price rise, all four cities covered in the index are among the top 10 in the United States. The contrast with European cities is startling. Over a 12-month period, luxury pricing in North American cities increased by 10.5 percent on average, compared to barely 1 percent in European cities.
According to Knight Frank, Seoul was included for the first time in this quarter. Since their low in 2013, prices in the South Korean capital have been steadily rising.