A chronic lack of prime properties coming to market and increased foreign demand attracted by a weak Canadian dollar led to Vancouver recording the greatest jump in house prices of any world city last year.
With growth of 25%, the Canadian city, famed for its picturesque coastal location and mountains, topped Knight Frank’s survey of prime house price growth. The London-based real estate consultancy reviewed market activity in 100 cities around the globe as part of its annual Wealth Report, released today. Supply in Vancouver is currently at its lowest level in a quarter century.
Kevin Skipworth of Knight Frank’s partner Dexter Associates, said, “The number of multifamily developments along the major transportation routes is rising but this is not enough to make up for the lack of prime market supply.”
This came one day after investment bank RBC warned that it has never been so unaffordable to own a single-detached home in the Vancouver area. It believes that sellers are very much in control and prices are likely to continue to rise rapidly in the coming months.
Antipodean markets also performed well in 2015, with Sydney, Melbourne and Auckland recording double-digit annual price growth, up 15%, 12% and 10% respectively.
Average prime house prices in New York , meanwhile, rose by just 2.4% as currency movements caused sales to slow. London’s most expensive neighborhoods eked out average growth of 1%, despite higher property taxes dampening demand at the top end.
Elsewhere in Europe, Munich, Amsterdam, Monaco and Berlin were the standout performers, recording price growths of 12%, 10%, 10% and 9% respectively. However, of the 34 locations where prime prices slipped in 2015, 22 of these were in Europe.
Of the 100 cities highlighted in the report, Lagos saw the greatest fall, with an estimated 20% in lost value; the former Nigerian capital was followed by Buenos Aires, which saw prices drop by 8%. Knight Frank chalked up these declines to the Federal Reserve’s recent rate rise, the strong U.S. dollar and the collapse in commodity prices.
For the ninth year in a row, Monaco was named the most expensive city in which to buy luxury residential property, with $1 million commanding just 17 square meters of space (about 170 square feet). Hong Kong and London came in second and third place, with 20 and 22 square meters on offer for the same price.
Looking forward, Knight Frank identified Vietnam as an investment opportunity, thanks to new rules in 2015 that opened up property markets to foreign interests.
“Although many markets in the AsiaPacific region are close to, or at the top of, their cycle, Vietnam, the Philippines and possibly Japan look likely to outperform in 2016,” the report concluded.
The Wealth Report also singled out posh ski resort Meribel in the French Alps, Los Angeles, Madrid, Shanghai and Australia’s Gold Coast as strong investment opportunities.
- Source: Mansion Global Photo: Rob Atkins and Mansionglobal.com