New York, USA, is expected to be the top-performing prime city for real estate in 2015, with Sydney, Australia, the only other destination in the Prime Global Cities Forecast to see price rises.
Luxury prices across Manhattan are expected to rise 5%-10% in 2015, boosted by strengthening foreign interest from Chinese, British, Russian and Latin American buyers and an improving economy, says Knight Frank in its Quarter 4, 2014 Prime Global Cities Forecast.
Sydney is also on the radar of foreign buyers and limited luxury supply could see prices rise by up to 5% in 2015, Knight Frank predicts.
With uncertainty surrounding the UK 2015 General Election, London is forecast to see volume weaken in 2015 with prices staying stable.
Knight Frank Partner, Kate Everett-Allen says, “The biggest faller is likely to be Dubai, where luxury prices could fall by 5-10% in 2015, Knight Frank predicts, with a growing appetite from Indian purchasers cushioning the market a little.
Of the eight cities in the report, luxury real estate price gains are expected only in New York and Sydney, with stable values in London and falls in Paris, Singapore, Hong Kong, Geneva and Dubai.
New wealth, investment in infrastructure and a continuation of the safe haven trend are likely to all help drive growth, but a slowing global economy along with major tax changes are major risks for the world luxury residential markets in 2015.
“Luxury residential markets face a diverse range of challenges and opportunities in 2015. Now that stimulus measures have all but disappeared in the US and the UK all eyes are on Europe and Japan and the extent to which they could halt the tentative global recovery, explains Ms Everett-Allen.
“Since 2009, a number of the key housing markets worldwide have been supported by government stimulus measures. The slow withdrawal of such initiatives in markets such as the UK and the US, along with the potential relaxation of cooling measures in Hong Kong and Singapore, could mean that 2015 sees a more level playing field for the world’s top luxury housing markets.”
In Sydney, rising business confidence and an increasing sense of political stability is helping to attract interest from overseas. The weak Australian dollar is adding to this momentum and also reviving interest from Australian ex-pats, says the report.
Source: Adrian Bishop, Editor, OPP Connect