Prime Property Price Growth Continues but Slows Drastically
01 November 2011
According to the latest release of the Knight Frank global cities index for Q3, prime property prices in the world's leading cities are continuing to grow, but growth is slowing drastically. According to the data prime property prices grew 4.3% across the 21 cities covered in the year ending September, this is the smallest annual growth seen for 2 years.
Throughout 2010 prime properties in the world's prime cities saw their prices soar. The world's wealthiest individuals, seeking to solidify their assets as it were, began buying such properties because they were holding their value against the volatility, and this surge of demand saw prices actually start to grow very strongly, just as similar motivations had first kicked off the gold rush.
This growth has continued into 2011 but at a much slower pace. In Q2 the index showed that prime property prices grew by 6.8% in the year to end June 2011, down from growth of 13.5% in the year ending June 2010. A similar story in Q1 when prime property prices grew 6.6% in the year ending March 2011, down from 12.7% in the year ending Q1 2010.
However, this slowdown in the rate of growth needn't be perceived as negative. For a start, we have all seen the damage that can be caused by growth being too fast to be sustained. And also, as we come into the 4th year of global frigidity, and hear or more and more markets thought to have bottomed, it is entirely possible that there is less demand for prime properties, because more investors are gaining confidence in other sectors and areas of the global property market. You can view the full table of data from the Q3 index below.