These International Cities Bring Cost and Opportunity to Luxury Real Estate

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In a world where housing prices are rising all the time, certain urban cities are leading the pack, according to Knight Frank’s October, 2016 report. Of these, six of the top 10 are major municipalities in China.

China has long sizzled its housing prices, likely due to its humongous population. In this second quarter of 2016, the Knight Frank survey showed that China had retained this sport, but this time had also shared its proclivity with Britain. The top 10 cities on the list with highest price increases were six from China and four from Britain.

China’s top six cities are Shenzhen, Shanghai, Nanjing, Beijing, Guangzhou, and Hangzhou. The top four British cities on the European list are Bristol, London, Nottingham, and Birmingham.

Not to be outdone, other international cities also hiked their prices with urban cities racing the pack.

“Of the 150 cities tracked by the index, 76 percent saw house prices increase in the year to June 2016,” says Kate Everett-Allen, partner of international residential research at Knight Frank. “A comparison of our global indices shows urban house prices are outperforming their national averages.”

Cities included Shenzhen, China; Shanghai; Nanjing, China; Budapest, Hungary; and Vancouver, Canada. Thirty-one of these cities spun their prices to more than a double-digit increase.

These are the regions that you may not want to rent in, although another report from Knight Frank revealed that Chinese and British cities are doing extremely well in the luxury real estate market.

“Two trends stand out. Firstly, the extent to which some tier one Chinese cities have risen up the rankings in the last 12 months, and secondly, the strong performance of key U.K. cities, outside of London,” Ms. Everett-Allen told Luxury Daily, a leading luxury business publication.

To the other end of the spectrum, prices in other areas fell rapidly in the past year. Moscow entered a torrid market with its volatile economy. Prices melted 11 percent from last year to June 2016.

Istanbul, Turkey, and Stockholm, Sweden, also reached new lows with Istanbul slipping from third to ninth and Sweden from sixth to 29th. Jaipur, India, cooled, too.

For major urban housing markets across Asia and Europe, conditions may escalate in a bubble, although Claudio Saputelli, head of global real estate in the Chief Investment Office at UBS Wealth Management negates the possibility of a crash. At the same time, the luxury market situation in some of these prime cities is doing well.

The plight of rising prices seems to favor high-quality investors.

Image courtesy of Shutterstock

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