Hong Kong, New York are all experiencing a decline in the prices of luxury homes
Sydney and Dubai are both set to benefit from an increase in the high-net-worth populations. Prices will rise 9.9% and 5,9% respectively. Amsterdam and Tokyo’s growth forecasts, as well as the positive capital value forecasts for all 30 cities, have helped keep the average capital values forecast positive.
Savills believes that the wave of elections in nearly 70 nations in 2024 will likely restrict prices in major cities.
The year 2020 is an election year, and this adds a layer of uncertainty. We therefore expect capital value growth to be lower in 2024 but still positive.
Hong Kong, New York, and San Francisco are at least a dozen of the largest cities facing a fall in residential property value this year.
Bloomberg had a report on the subject that predicted a slower rate of growth for residential capital values. More than half (30) of the cities globally monitored by Savills would experience fewer gains in 2024. Globally, Savills predicts a slowdown in growth in high-end home values this year. The firm’s forecast is that it will be down to just 0.6 per cent from the 2.2 per cent recorded in 2023.
Hong Kong’s high rates of interest and political uncertainty are driving sales and deterring potential buyers. As a result, prime residential property prices will probably fall by more than 10 percent this year.
Savills has tracked the growth of global prime rentals values, which grew by 5,1% in 2023. The increase was partly driven by buyers delaying purchase until interest rates stabilised.
Lisbon experienced the highest average rental growth of 22 percent between July last year and December, as demand surpassed supply after the introduction rent controls. In spite of this, the prospect for homebuyers is improving in 2024. Savills believes that a central bank’s decision to lower interest rates could boost prices in the last quarter of this year.
Even though prime residential properties have a lower mortgage resistance than mainstream residential property due to weaker macroeconomic conditions, this will impact sentiment. Many potential sellers and buyers will take a wait-and-see approach.
A shortage of houses is keeping the prices on the rise, while sharply higher borrowing rates are likely to remain. Prime residential markets, which include the most affluent areas of global cities, saw muted development in 2023 after a sudden surge in demand following the pandemic.
New York is also a weak spot, as it has seen a mild return to office, while San Francisco continues to be impacted by tech turmoil.
Chinese cities, including Shenzhen Guangzhou Hangzhou may also experience a drop in property prices as the government tries to stabilise a volatile market.