Demand for established luxury residential markets globally has plateaued, according Christie’s International Real Estate.
It said that demand for London, New York and Hong Kong has stalled, while emerging or ‘affordable’ locations have taken up the slack.
Despite this, London retained the top spot in its Luxury Defined report for the fourth year in a row, with the top five rounded off by Hong Kong, New York, Los Angeles and Singapore, based on a number of luxury variables.
Top 10 rankings
| Luxury City Rankings | ||||
|---|---|---|---|---|
| 2012 | 2013 | 2014 | 2015 | |
| London: | 1 | 1 | 1 | 1 |
| Hong Kong | 4 | 4 | 3 | 2 |
| New York | 2 | 2 | 2 | 3 |
| Los Angeles | 6 | 3 | 5 | 4 |
| Singapore | n/a | n/a | n/a | 5 |
| Sydney | n/a | 6 | 4 | 6 |
| Miami | 8 | 9 | 9 | 7 |
| San Francisco | 7 | 5 | 6 | 8 |
| Paris | 5 | 7 | 7 | 9 |
| Toronto | 9 | 10 | 10 | 10 |
New markets are however emerging.
Auckland in New Zealand replaced Toronto in Canada as the world’s hottest location, based on the increase in luxury homes sales. The top five include Auckland, Toronto, Victoria, Valencia and San Francisco, respectively.
The report said that ‘affordable’ cities that have seen a growth in affluent migration, industry wealth creation and an uptick in their economy are seeing an incredible growth in demand for prime properties.
Other comeback cities, including Dublin, Monterrey, and Atlanta, among others, are experiencing high double-digit increases in sales
Defining prime
| Luxury begins at | Global asking price v discount | ||
|---|---|---|---|
| $1m – Atlanta | Asking price ($) | Discount % | |
| $1m – Sao Paulo | 30m | 18% | |
| $2m – Miami | 20-30m | 15% | |
| $3m – Toronto | 10-20m | 11% | |
| $5m – Hong Kong | 5-10m | 4% | |
| $5m – New York | 3-5m | 8% | |
| $5m – Los Angeles | 1-3m | 6% | |
| $7m – London | 750,000-1m | 4% | |
| $8m – Sydney | under 750,000 | 3% | |
| $10m – Monaco |
The report examines 100 luxury real estate markets and provides first-hand insights into the drivers shaping them.
“The combination of high-volume and record-breaking prices were unsustainable at peak levels” said
Dan Conn, chief executive, Christie’s International Real Estate.
“There needed to be a slowdown in these key markets and that is what began to occur in the middle of 2015 and into 2016. This is what we call a ‘return to realism’ year. Beyond that we observed 2015 and 2016 to date as the age of the underdog, with less prominent markets performing extremely well.”
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