A new report called Prime Global Cities Forecast defines the most active prime property markets for the next year. The research focuses on luxury residential markets and states that 2015 will be a year of both new opportunities and challenges for prime property markets.
There are no new cities on the list of hottest luxury residential markets for the next year. However, the majority of the runner-ups are predicted to witness a decline in 2015. Those include Paris (4), Singapore (5), Hong Kong (6) and Geneva (7). All of them are expected to witness a decrease of around 5% at the most next year.
Nevertheless, Dubai is said to register the steepest decline, with the prime residential market likely to fall by up to 10% in 2015.
Only two markets are predicted to see a rise. New York, which is also expected to be the hottest luxury property market next year, will witness up to 10% increase. Australia’s Sydney, the second most attractive prime residential property market for 2015, is likely to advance by up to 5%.
The report also outlines the biggest risks and opportunities for prime property markets in 2015. Removal of government stimulus is predicted to be the biggest challenge for the sector. Nevertheless, factors like currency instability, tax, political intervention and economic reversal are also expected to shake many of the strongest luxury real estate markets.
In Dubai, however, the top risk will be the government cooling measures. A combination of slowing global economy, geopolitical risks, high inflation and low household income growth could challenge the luxury real estate market unless some unexpected changes in policies will be implemented, such as for example a reduction of the property transfer fee to 2%.
On the other hand, prime residential markets will also benefit from a number of great opportunities in 2015. The most important of them will be the new wealth coming from the emerging markets. It is very much likely that demand for investment in residential property will rise.
Another opportunity might present the improving economic climate, especially in Europe. In addition, the wealth inflow from locations of political and economic crisis into the so-called safe-haven markets will not stop in 2015.
The top prime residential markets for 2015 are: New York, Sydney, London, Paris, Singapore, Hong Kong, Geneva, Dubai.