For the past five years, the Christie’s International Real Estate Index has categorized and ranked the world’s top performing luxury property markets by assessing and synthesizing several quantitative market dynamics on an annualized basis. In 2015, the firm expanded its Index rankings to measure not only the top 10 most “luxurious” cities for real estate (Luxury Index), but also the top 10 “hottest” performing prime property markets (Luxury Thermometer).
Since the study’s inception, London has dominated the Luxury Index, towering above all other prime property markets with more luxury listings, deeper density of milliondollar-plus property sales, comfortably ahead of runners up New York and Hong Kong.
For the first time ever, this year Hong Kong has seized the top slot. With four residential sales above $100 million, capped by a single sale eclipsing $270 million, Hong Kong led in almost all categories and set new sales price records for the region. The city-state takes the crown despite new stamp duties that were introduced in December to manage the limited supply of real estate and curb rising property prices. Despite these measures, there still appears to be significant demand for premium real estate in the city, particularly in the top echelons, which saw continued demand from mainland Chinese buyers seeking to hedge against yuan depreciation.
Still among the top markets in price per square foot and average luxury home sales price, London drops to second place. Despite property tax hikes and uncertainty over the UK’s EU Referendum, London remains a fixture as a premier city for prime property and the post-referendum decline in the pound has spurred renewed interest in luxury prime central London homes from US dollar-denominated buyers.
Another to drop in this year’s Index rankings is Miami, moving to tenth from seventh place. A decline in luxury sales activity, an influx of new development condos, and a steep increase in inventory supply has impacted the market. Well-priced Miami properties are still selling based on existing demand, which remains significant though diminished, but price reductions are becoming more commonplace in the coastal city.
Also notable in this year’s Index rankings is the upward movement of Toronto and San Francisco. Both cities placed on our 2016 Luxury Thermometer list, revealing that market momentum often has a flow-on effect on house prices and high-end inventory.
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