PRICE PERFORMANCE SPECIAL FOCUS: PRIVATE ISLANDS RISKS AND OPPORTUNITIES RESIDENTIAL RESEARCH The Prime Global Cities Index increased by only 1.9% in the year to September 2015 but this conceals some standout performances by cities such as Vancouver and Sydney. Kate Everett-Allen examines the latest results. Vancouver leads the rankings for the Around 73% of cities recorded positive second consecutive quarter with prime annual price growth in the year to The index increased by 1.9% in the prices in the city up by 20.4% in the year to September; two years ago this figure was year to September 2015 September. Supply is tight with the number closer to 91% (figure 2). of homes for sale down 32% year-onyear and local demand is strengthening prime market tracked by the index for the Singapore was the weakest-performing Three cities recorded double-digit annual price increases; Vancouver, alongside foreign interest. for the seventh consecutive quarter, but Sydney and Shanghai Sydney and Shanghai also recorded the rate of annual decline has slowed double-digit annual price growth, from -15.2% at the end of Q2 to -7.9% increasing by 13.7% and 10.7% this quarter. The index now stands 34.1% above its low in Q1 2009 but its annual rate of respectively year-on-year. Analysis by world region shows Australasia growth is slowing leads, with average annual price growth The weak Australian dollar, an undersupply of 11.6%, followed by North America at of new homes and a strong local economy 8.5%. Europe, at 0.8% is now in positive Around 73% of cities recorded positive are behind Sydney’s accelerating prices, territory but performance varies, from 9.4% annual price growth in the year to whilst in Shanghai the reversal of strict in Monaco to -5.1% in Zurich. September, two years ago this figure housing policies, and the introduction of new fiscal measures, including tax and As QE unwinds and a US rate rise draws was closer to 91% interest rate cuts, has fuelled demand. near, prime assets will remain on the radar of investors and HNWIs. The big question Singapore is home to the weakestperforming luxury residential market overall performance of the index is less Eurozone but the slowdown in the Chinese Looking beyond the top rankings, the mark surrounds not Greece and the for the seventh consecutive quarter robust. The index now stands 34.1% economy. Wealth from China will continue above its low in Q1 2009 but its annual rate to flow into overseas property markets of growth has slowed significantly from 7% with the UK, US, Canada and Australia two years ago to 1.9%. being key target destinations. KATE EVERETT-ALLEN Partner, Residential Research “ The index’s annual rate of growth has slowed significantly from 7% two years ago to 1.9%.” Follow Kate at @keverettkf For the latest news, views and analysis on the world of prime property, visit Global Briefing or @kfglobalbrief FIGURE 1 FIGURE 2 Prime price performance by city Shifts in luxury residential prices Annual % change to Q3 2015 Proportion of cities by annual price change Vancouver Sydney Shanghai Jakarta Melbourne Monaco Bangkok Seoul Bengaluru Cape Town Miami¹ Los Angeles¹ Madrid Nairobi Beijing Tel Aviv Mumbai Edinburgh New York¹ Tokyo² Delhi Hong Kong London Dublin Rome Guangzhou Kuala Lumpur Vienna³ Taipei Paris Geneva Moscow Zurich Singapore -20% -15% -10% -5% 0% 5% 10% 15% 20% Source: See main table on page 2 ¹ Based on top-tier of mainstream market in metro area ² Based on all contracts above Yen100m ³ Provisional Source: See main table on page 2 0% 20% 40% GLOBAL BRIEFING For the latest news, views and analysis on the world of prime property, visit KnightFrankblog.com/global-briefing Data digest The Knight Frank Luxury Investment Index (KFLII) tracks the performance of a theoretical basket of selected collectable asset classes using existing third-party indices (see below). Each asset class is weighted to reflect its relative importance and value within the basket. The third-party indices selected are widely used by the media and analysts to track the performance of each asset class, but Knight Frank can take no responsibility for their accuracy or independence and methodological differences may affect like-for-like comparisons. The index does not take into account any dealing, storage or management costs. Methodological differences could impact like-for-like comparisons. Research Andrew Shirley The Wealth Report Editor +44 1234 720534 firstname.lastname@example.org Media & Marketing Jamie Obertelli +44 20 7861 1104 email@example.com The Knight Frank Luxury Investment Index Index change 12-month change Five-year change 10-year change Sep-05 100 Mar-06 106 Sep-06 111 11% Mar-07 121 14% Sep-07 137 23% Mar-08 159 32% Sep-09 173 26% Sep-08 175 10% Mar-10 175 2% Mar-09 183 4% Sep-10 188 7% 88% Mar-11 203 11% 92% Sep-11 212 13% 91% Mar-12 222 9% 84% Sep-12 229 8% 68% Mar-13 238 7% 50% Sep-13 254 11% 47% Mar-14 269 13% 53% Sep-14 277 9% 58% Mar-15 290 8% 59% Sep-15 306 10% 63% 206% INDEX SOURCES Art Chinese ceramics Antique furniture Jewellery Watches Wine Classic cars Stamps AMRD AMRD AMRD AMRD AMRD Wine Owners Historic Automobile Group International (HAGI) Stanley Gibbons Coins Stanley Gibbons Coloured diamonds Fancy Color Research Foundation Please contact firstname.lastname@example.org for more details of each index Front cover: The Hope Spinel, sold by Bonhams, London, for £962,500 in September 2015 Contacts and acknowledgements HAGI www.historicautogroup.com; Stanley Gibbons www.stanleygibbons.com; Wine Owners www.wineowners.com; Fancy Color Research Foundation: www.fcresearch.org; AMRD www.artmarketreport.com. AMRD also tracks the price-movement of: sculpture, silver, porcelain, toys, carpets, clocks, photography, prints and many other collectibles. For more information contact email@example.com Knight Frank Research provides strategic advice, consultancy services and forecasting to a wide range of clients worldwide including developers, investors, funding organisations, corporate institutions and the public sector. All our clients recognise the need for expert independent advice customised to their specific needs. The Wealth Report 2015 The Luxury Investment Index is part of The Wealth Report, which is published annually in March by Knight Frank. For more details please go to www.knightfrank.com/wealthreport RECENT MARKET- LEADING RESEARCH PUBLICATIONS RESIDENTIAL RESEARCH THE ISLAND REVIEW ASSESSING CURRENT PROPERTY MARKET CONDITIONS ACROSS THE WORLD’S TOP ISLAND DESTINATIONS 2015 The Island Review 2015 PRIME GLOBAL CITIES INDEX Results for Q3 2015 VANCOUVER AND SYDNEY LEAD THE PRIME GLOBAL CITIES INDEX DECREASE DECREASE INCREASE INCREASE SIGNIFICANTLY SLIGHTLY SLIGHTLY SIGNIFICANTLY 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 60% 20% 40% 60% 80% 100% Prime Global Cities Index - Q3 2015 Knight Frank Research Reports are available at KnightFrank.com/Research © Knight Frank LLP 2015 This report is published for general information only and not to be relied upon in any way. 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