kamaco World Cities Prime Residential Index H1 2019

07 August 2019

• Hong Kong and Greater Bay Area cities join the world’s priciest residential markets
• Most Asian cities saw prime residential prices rise, while the US recorded falls

Hong Kong – 07 Aug 2019 Price growth across the world’s leading prime city housing markets has continued to slow during the first half of 2019, rising by just 0.4%, taking the annual growth to 0.7%. This compares to a 5.1% YoY increase in the year to June 2018. All six cities tracked in Greater China recorded solid growth, with Hong Kong topping the table as the world's most expensive housing market.

“There are a number of reasons why the prime residential markets in global cities are seeing a slowdown, with government policy, the cost of money, increased supply and global economic uncertainty all playing their part,” says Ms. Sophie Chick, head of kamaco World Research. “Despite this, we do not expect significant price falls across the index, but that growth will remain flat or experience small increases in value in the medium term.”

kamaco World Cities Prime Residential Index - capital values price per square foot / square metre and price movements in local currency – cities ranked by half year growth

 

City

Half year growth to June 2019

Full year growth to June 2019

Five-year growth to June 2019

Ten-year growth to June 2019

Price PSF

(US$)

Price PSF

 (HK$)[1]

Price PSM

 (CNY) [2]

Berlin

4.2%

8.2%

54.7%

122.4%

$960

$7,524

¥72,805

Paris

3.9%

7.6%

18.8%

52.7%

$1,570

$12,305

¥119,067

Beijing

2.9%

2.9%

86.0%

283.1%

$1,480

$11,599

¥112,241

Kuala Lumpur

2.4%

2.0%

13.7%

84.2%

$260

$2,037

¥19,718

Bangkok

2.3%

4.7%

42.1%

121.9%

$880

$6,897

¥66,738

Hangzhou

2.2%

2.1%

40.8%

74.6%

$960

$7,524

¥72,805

Shenzhen

1.9%

1.7%

96.6%

323.8%

$1,480

$11,599

¥112,241

Hong Kong

1.3%

0.9%

41.6%

121.1%

$4,730

$37,072

¥358,718

Moscow

1.2%

-0.4%

-15.1%

24.2%

$1,250

$9797

¥94,799

Shanghai

1.0%

2.8%

25.4%

101.8%

$1,750

$13,715

¥132,718

Tokyo

0.9%

2.7%

46.1%

49.2%

$2,150

$16,851

¥163,053

Guangzhou

0.8%

0.7%

48.7%

86.6%

$1,200

$9,405

¥91,007

Barcelona

0.7%

2.1%

-

-

$650

$5,095

¥49,295

Madrid

0.1%

0.9%

14.9%

-11.3%

$730

$5,722

¥55,362

Los Angeles

-0.1%

-0.5%

32.8%

83.0%

$1,400

$10,972

¥106,174

London

-1.0%

-2.8%

-18.1%

36.3%

$1,840

$14,421

¥139,543

Singapore

-1.1%

-1.2%

2.5%

49.7%

$1,560

$12,226

¥118,308

Cape Town

-1.2%

-2.8%

64.4%

-

$330

$2,586

¥25,027

New York

-1.8%

-4.8%

7.1%

40.5%

$2,520

$19,751

¥191,114

Dubai

-1.9%

-3.8%

-19.8%

-1.7%

$600

$4,703

¥45,503

Sydney

-2.3%

-2.8%

43.1%

74.7%

$1,610

$12,618

¥122,100

Miami

-3.4%

-3.5%

11%

54.8%

$980

$7,681

¥74,322

San Francisco

-3.0%

-0.9%

38.2%

88.8%

$1,580

$12,384

¥119,825

Source: kamaco Research

[1] Exchange Rate - Bloomberg Markets, 10AM (GMT+8), 7th August 2019

[2] Exchange Rate - Bloomberg Markets, 10AM (GMT+8), 7th August 2019

Latest data from kamaco World Cities Prime Residential Index shows that Berlin and Paris have seen stand out growth for prime residential property of approximately 4% over the last six months and 8% over the last year. Both markets have low supply levels coupled with increasing demand from domestic and international buyers.

A similar pattern was seen in Moscow where prices increased by 1.2% following years of price falls as Russian money returns to the capital due to scrutiny of Russian money overseas.

Elsewhere in Asia, Kuala Lumpur and Bangkok, where prices are US$260 and US$880 per sq. ft respectively, both saw prime prices rise by nearly 2.5% in the first half of the year.

Conversely, many of the cities in the US have seen price falls overs the first six months of 2019 due to recent tax changes impacting demand and, in the case of New York and Miami, high levels of stock on the market.

In Sydney and Cape Town, values have increased significantly over the past five years but are now experiencing price falls as affordability, amongst other things, slows the market. Prime prices in Dubai have fallen 20% in the last five years and are still falling due to high levels of new build stock and global economic uncertainty.

Sophie Chick continues, “Over the short term, we expect to see European cities continue to outperform as they benefit from Brexit and comparably lower prices on a global scale. Over the long term, wealth generation will be critical to the growth of the city’s prime residential markets along with political and economic stability and favourable demographics.”

Mr. Simon Smith, Senior Director, Research & Consultancy commented: “Hong Kong, which still has the most expensive residential property in the world at US$4,730 / sf (HK$37,072 / sf), saw growth of 1.3% in 1H 2019. Prices have soared by 121.1% to a record high despite a few fluctuations during the past decade; though the past few months have seen a fall in transactions volumes in response to the trade war and local events.”

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