UK house prices: It’s not just London where luxury house price growth is slowing – prime property price growth is slowing across the world
It's well known that price growth among London's most high-end properties has slowed in recent months as various factors – including a punishing stamp duty regime and a slowdown in China – took effect. But it turns out it's not just London where prices have slowed: growth is slowing across the world.
The Prime Global Cities Index, by upmarket estate agent Knight Frank, increased by just 1.9 per cent in the year to the end of September, a significant drop from its peak of seven per cent two years ago (although the index does still stand 34.1 per cent above its low in 2009).
Vancouver topped the list, with year-on-year price growth of 20.4 per cent, or 5.2 per cent in the past quarter, while Sydney came second, with growth of 13.7 per cent in the past year – or 3.6 per cent in the past three months.
While Vancouver was pushed up by tight supply, Sydney's popularity was caused by the weak Australian dollar, an undersupply of new homes and a strong local economy, said Kate Everett-Allen, a residential research partner at Knight Frank and the report's author.
Meanwhile, cities which have traditionally topped the list – including London, New York and Tokyo – found themselves further down the ranking.
Price growth among London's swankiest homes was just 1.3 per cent in the year to September, while growth in New York was two per cent and Tokyo was just 1.8 per cent.
In London, property now makes up 20 per cent of high net-worth individuals' wealth, compared with 33 per cent in the US, Singapore and India; 30 per cent in China and 27 per cent in Austrlia.
However, Everett-Allen also suggested this may just be a blip.
"As quantitative easing unwinds and a US rate rise draws near, prime assets will remain on the radar of investors and high net-worth individuals.
"The big question mark surrounds not Greece and the Eurozone but the slowdown in the Chinese economy. Wealth from China will continue to flow into overseas property markets with the UK, US, Canada and Australia being key target destinations."
