Premium properties in prime global markets will have a challenging 2024, according to new findings.
Real estate company Savills has predicted that, in many cities across the world, residential capital value growth will slow this year, going down appreciably compared to 2023, Bloomberg reported.
In the report, the UK-based brokerage anticipates that, of the 30 global cities it monitors, at least a dozen will see the worth of their high-end homes slow to 0.6% in 2024, the lowest gain rate since 2019, and down from 2.2% in 2023.
Impacted metropolises include Hong Kong, New York and San Francisco, the three cities driving the trend.
To blame are high interest rates, the shortage of available properties and, in China — for Hong Kong as well as the cities of Shenzhen, Guangzhou and Hangzhou — the nation’s current political and property market precarity.
For San Francisco and New York, upheaval in the tech industry and workers’ tepid return to office are the most significant driving factors.
“Even though prime residential is less mortgage reliant than mainstream residential property, weaker macroeconomic conditions will dent sentiment,” Savills researcher Kelcie Sellers told the outlet, explaining that this will result in many would-be homeowners not making moves in coming months: “Many potential buyers and sellers will adopt a ‘wait to see’ approach.”
That this is an election year in the US, Savills director of global residential sales Jelena Cvjetkovic noted in the report, also adds turbulence and will contribute to lower growth in 2024.
But despite all these factors, the year is still set to see positive levels of capital value growth, Cvjetkovic added.
This is likely thanks to cities beyond the US and China bringing price growth to the year’s global average: Amsterdam, Tokyo, Sydney and Dubai — the latter two having recently had an increase in wealthy residents — are all set to see prices grow in 2024.