Miami and Dubai Lead Price Growth as Many Global Cities See Slowdowns

Investors keeping an eye on how prime property markets across the globe are performing in the midst of broad economic uncertainty are likely to land on a short, if frustrating, answer: It’s complicated.

Overall growth for prime residential prices in 45 global cities slowed from a pace of 10% in the first quarter of 2022 to 7.5% in the second quarter, according to Knight Frank’s Prime Global Cities Index for Q2 2022, released Wednesday. (In the report, “prime” is defined as the top 5% highest priced properties in any given market.)

More: ‘Quality of Life’ Draws Luxury Buyers to Europe

But slowing growth doesn’t necessarily equate to struggling markets, and a number of cities are bucking the trend and seeing dramatic price increases. Dubai, Miami, Los Angeles and San Francisco saw the strongest growth, with year-over-year second quarter price increases of 64.8%, 37.3%, 23.4% and 22.2%, respectively.

One surprising factor in the data was “the extent to which prime central London and New York are out of kilter with other global cities,” Knight Frank head of international research Kate Everett-Allen told Mansion Global. “Other markets are seeing the rate of prime price growth slow while London and New York are recording their strongest rates of growth for seven and eight years, respectively.” (New York saw year-over-year price growth of 7.3% in the second quarter, and London prices grew by 2.5% during the same period.)

European cities also saw stronger-than-expected price performance, Ms. Everett-Allen said, noting that “on average the 14 European cities within the index registered annual price growth of 5.6% in the year to June 2022.” Berlin, Dublin and Edinburgh saw some of the strongest annual growth in the second quarter, with price growth of 12.6%, 10.2% and 11.2%, respectively.

Still, price growth slowed in 19 out of the 45 cities studied, and Knight Frank wrote in their report, “rising mortgage rates and a weakening global economic outlook are cooling some of the ebullience of the last two years, but the slowdown will be felt most in lower price brackets and domestic-driven markets.” 

Toronto, Stockholm and the New Zealand cities of Auckland and Wellington,registered some of the largest declines in annual price growth. “Prices in Auckland are averaging 1% price growth in the year to June 2022, down from 17.6% in March,” Ms. Everett-Allen said.

More: Remote Working Continues to Fuel U.K. Housing Market

Only six cities saw actual price declines in the second quarter—Manila, Philippines; Kuala Lumpur; Malaysia, Jakarta, Indonesia; Guangzhou, China; Frankfurt, Germany; and Wellington—the same number as in the first quarter, according to the report.