London’s prime property prices are down 1.7 per cent since last year, but the UK capital is still outperforming New York.
Average prices for luxury houses in New York are down 4 per cent since 2022, according to the latest Prime Global Cities Index from Knight Frank.
The long-term rival cities have been competing for post-pandemic recovery metrics, and London has come out on top in terms of prime property value.
But at 35th and 42nd place respectively, London and New York are firmly at the bottom of the league of 46 alpha cities.
At 18th place, Paris has seen an increase of 2.1 per cent year-on-year for luxury property, with the super rich apparently undeterred by reports of bedbugs plaguing the city.
The French capital is set to host the 2024 Olympic Summer Games, which could be giving a short-term boost to property prices.
Paris’s mayor Anne Hidalgo is busy turning the city into a climate change haven, prioritising residents’ wellbeing with plans to make the city bikeable and introducing more green spaces.
London prime prices are not immune
Knight Frank put London’s drop in the rankings down to the UK’s current issues.
“Despite the relative stability of prime markets this year, London prime prices are not immune to the impact of rising interest rates and broader economic and political uncertainty,” said the report.
“These factors are expected to continue exerting pressure on prices in the short term.”
Across London, the super rich have had to slash millions from the asking prices of their mega-mansions to try and attract sales.
Oversees buyers are increasingly cautious investors in the London luxury property market after increases to stamp duty and the chance that Labour could dismantle the non-dom tax system should they win the next election.
On the other hand, Asian markets dominated the prime property rankings.
Manila came top for 2023 Q3, with prime property prices up 21.2 per cent since last year as ultra-high net worth individuals from the Philippines and oversees flocking to invest in luxury homes.
Shanghai came in third with a 10.4 per cent rise in luxury property price growth.
A world of lower asset price growth
Dubai has dropped to second place with 15.9 per cent annual growth as quarterly growth slowed.
Tokyo, which had rocketed up to second place last quarter, has seen prices fall by 12 per cent, sending it down to 29th place.
Overall, prime property prices rose 2.1 per cent across the 46 global cities.
“The improvement in average annual house price growth will be welcomed by prime market homeowners but shouldn’t be overstated,” said Liam Bailey, Knight Frank’s global head of research.
“Higher rates mean we have moved into a world of lower asset price growth - and investors will need to work harder to identify opportunities for outperformance to secure target returns.”
Prime property sales have been slow in London this year, with only 36 $10m-plus homes sold in the first quarter of 2023.
