By: Hellen Zaboulani

Luxury home prices in New York and London pale, compared to luxury home prices in some Asian cities.

As reported by Bloomberg News, prime property prices — which are the top 5% most expensive in the market — fell more than 2% in New York and London in the first quarter of 2024 compared to the same time frame last year. The data, released by real estate consultancy Knight Frank, shows that Hong Kong, Frankfurt and Berlin also saw declines in their prime property prices. At the same time, the prime property prices in select Asian cities increased – including Manila, Tokyo and Mumbai, where luxury home prices jumped 27%, 13% and 12%, respectively.

High end housing in the United States and Europe are slightly shrinking due to worries of recession and due to high interest rates. Across the globe, however, prime real estate prices have recovered this year amid robust economic growth and healthy demand from rich investors, with an average annual growth of 4 percent in the 44 cities studied in the Knight Frank report. Manila, in the Philippines, showed the strongest growth rate for luxury housing prices, with impressive 26% growth for the 12-month period.

In Tokyo, the 13 percent average price increase was attributed to the weaker yen and lower borrowing costs, leading to higher demand from foreign investors. In Mumbai, the 12% luxury housing growth was in line with India’s booming economy, with the country slated to become the world’s top contributor to global GDP growth by 2028, per Bloomberg. Other Asian cities topped the list of luxury home prices—including Delhi (up 11%), Dubai (up 9%), Singapore (up 5%), Beijing (up 3%), and Shanghai (up 2%).

Other cities studied in the research included Miami, FL where prices were up 7%, marking the best gain in the US. San Francisco, CA was also listed, with a 2% gain in prices. NY (down 2%), London (down 2 %) and Hong Kong (down 3%) were among the losers of the year’s list.

Last year, Knight Frank’s prime property study had revealed zero growth at the end of 2022, as higher borrowing rates had put a damper on demand. This year, however, 78% of the markets in the study saw annual price growth for their luxury housing. The recent gains bring Knight Frank’s prime property index closer to their long-term annual growth rate of 5.4%. “Rather than heralding a return to boom conditions, the index indicates that upwards price pressures are stemming from relatively healthy demand, set against continued low supply volumes,” said Liam Bailey, Knight Frank’s global head of research.