Quincy Harrington - Luxury prices for the world's major cities are expected to slow by nearly half this year, from 3 percent in 2015 to 1.7 percent in 2016, according to the latest Knight Frank Prime Cities Forecast. The report said China's economic slowdown is mainly to blame, although rising rates in the U.S. and a slowdown in other emerging markets will also add to the headwinds.
Knight Frank defines the "prime" or "luxury" real estate market as the most expensive 5 percent of homes in each city.
"We're moving into a different environment where you won't see the level of wealth creation in China that you've seen in recent years," said Liam Bailey, global head of research for Knight Frank, the London based real estate firm.
China's slowdown is expected to hit its domestic housing market hard — as well as nearby markets in Asia favored by wealthy Chinese buyers. Price growth in Shanghai is expected to fall by more than half, from 10 percent in 2015 to 4 percent in 2016. Hong Kong is expected to see prices fall by 5 percent, making it the worst performing market, followed by Singapore, where prices are expected to fall 3.3 percent in 2016.
Yet the top global luxury market in 2015 — Sydney, Australia — is once again expected to top the price list in 2016, despite the large number of Chinese buyers in Australia. Sydney is forecast to see prices grow by 10 percent in 2016, slower than the 15 percent growth it saw in 2015, but still the best in the world.
Source cnbc.com
Knight Frank defines the "prime" or "luxury" real estate market as the most expensive 5 percent of homes in each city.
"We're moving into a different environment where you won't see the level of wealth creation in China that you've seen in recent years," said Liam Bailey, global head of research for Knight Frank, the London based real estate firm.
China's slowdown is expected to hit its domestic housing market hard — as well as nearby markets in Asia favored by wealthy Chinese buyers. Price growth in Shanghai is expected to fall by more than half, from 10 percent in 2015 to 4 percent in 2016. Hong Kong is expected to see prices fall by 5 percent, making it the worst performing market, followed by Singapore, where prices are expected to fall 3.3 percent in 2016.
Yet the top global luxury market in 2015 — Sydney, Australia — is once again expected to top the price list in 2016, despite the large number of Chinese buyers in Australia. Sydney is forecast to see prices grow by 10 percent in 2016, slower than the 15 percent growth it saw in 2015, but still the best in the world.
Source cnbc.com
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