Luxury real estate in the world’s major markets will experience difficulties in 2024, according to new research.
Real estate firm Savills has predicted that growth in residential capital values in many cities around the world will slow this year and be significantly lower than in 2023. reported by bloomberg.
The UK-based brokerage said in a report that luxury home values in at least 12 of the 30 global cities it monitors will fall to 0.6% in 2024, the lowest rate of increase since 2019. Expect. From 2.2% in 2023.
Large cities affected include Hong Kong, New York, and San Francisco, with these three cities leading the trend.
The causes are high interest rates, a lack of available real estate, and, in China, the current political and real estate market instability for the cities of Hong Kong, Shenzhen, Guangzhou, and Hangzhou.
For San Francisco and New York, disruption in the tech industry and a tepid return to the office by employees are the most important factors.
Savills researcher Kelsey Sellers said: “Although luxury homes are less dependent on mortgages than mainstream residential real estate, weaker macroeconomic conditions will likely worsen sentiment.” , explained that this will cause many would-be homeowners to not take action in the coming months. Potential buyers and sellers will likely adopt a “wait and see” approach. ”
Jelena Cvetkovic, director of global home sales at Savills, said the fact that this is an election year in the US will also add to the turmoil and contribute to lower growth in 2024.
However, despite all these factors, a positive level of growth in capital values is still expected this year, Cvjetković added.
This is likely due to cities outside of the US and China bringing price increases in line with the global average for that year. Amsterdam, Tokyo, Sydney and Dubai (the latter two cities have recently seen an increase in wealthy residents) are all expected to see price increases in 2024.
