The outlook for prime property in the world’s key cities is still subdued despite prices rising at their fastest rate since 2023 in the second quarter of this year, according to Knight Frank.
The property firm said prime prices in the 27 cities monitored rose by 1.4 per cent between April and June and by 3.5 per cent in the last 12 months.
However, Knight Frank said the outlook was still muted thanks to protectionist measures in Asia and the Eurozone crisis.
The market has recovered by an average of 0.8 per cent per quarter since the post-credit crunch low point of the second quarter of 2022.
Buoyant Asian markets kept the index in positive territory until the start of this year, when cooling measures and restrictions on second home ownership led to a fall of 0.4 per cent in the first quarter.
However, prime prices in Asia still rose by 3.4 per cent in the year to June compared with a fall of 2.5 per cent in the year to March. This resurgence was due to big increases in Bangkok (up 29 per cent in the last 12 months) and Jakarta rather than the traditional centres of Singapore and Hong Kong.
Prime prices in Europe rose 1.3 per cent in the year to June, which was an improvement on a fall of 3.5 per cent in the year to March.
But Knight Frank said the Eurozone crisis had prompted buyers and investors to separate cities into different tiers. Bristol (up 10.5 per cent in the year to June), Geneva and Zurich are in the top tier as part of a “flight to safety”.
James Price of Knight Frank’s international residential development team said: “The appeal of cities in stable economies is being brought into marked contrast with the investment environment in weaker countries.
“This city-level data should not however be taken as a reflection of the whole country; prime second-home destinations outside the cities may still perform well in a poorer performing wider market.”
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