Knight Frank pointed out in its latest Prime Global Cities Index that movement of luxury residential prices in 45 cities worldwide has registered the lowest annual growth rate since the last quarter of 2009. Even two years ago, prime property prices were rising at an average rate of 4.3% per annum, which has now slowed to 1.3%.
Delhi, at 7th position, managed to find a place among the top 10, while Berlin was at the top of the list with 14% growth, followed by Frankfurt at 10%. “The Indian residential market has been stagnant for a considerable period of time, with sales velocity — especially that of prime property — remaining slow, causing significant inventory overhang across major markets. Developers have also shifted their focus to higher-traction segments of the market, or affordable and mid-segments, due to the concentrated demand and the conducive environment created for these segments on the back of policy reforms and easier provisions,” says Shishir Baijal, C&MD, Knight Frank, India.
Global cities
European cities continued to outperform with seven of the top 10 rankings this quarter occupied by the European markets. Berlin (14%), Frankfurt (10%), Edinburgh (8%) and Paris (8%) are out in front, while Russia and CIS have come out as the strongest-performing world regions in the first quarter of 2019.
Reports say that the plunge in the growth in Q1 this year is because of looming global trade war threats, the International Monetary Fund’s prediction that a majority of the world’s economies are likely to witness a slowdown this year and ambiguity over the Brexit issue.
Key findings
- The latest Prime Global Cities Index increased by only 1.3% in Q1 of 2019, its lowest annual rate of growth since Q4 of 2009
- Delhi secured a spot in the top 10. Ranked at 7th position, prime property prices in Delhi grew by 5.8% on a 12-month basis and 4.4 % on a 3-month basis
- Bengaluru, at the 20th position on the index, witnessed a growth of 2% on a 12-month basis and 0.8% on a 3-month basis
- At 31st rank, Mumbai registered a dismal growth of 0.6% on a 12-month basis and 0.3% on a 3-month basis, indicating a momentum in prices in the affordable and mid-segment housing category
“However, a growth in the prime property market across key Indian cities should be viewed as a positive sign and going forward we must track the progress for the next couple of quarters to ascertain that the sector is moving towards recovery ,” added Baijal.
