Share
KUALA LUMPUR: Prime home prices fell in most locations last year except for key Asian cities. According to the Knight Frank Prime International Residential Index released recently, the price of prime residential property fell almost 75% globally but several cities in Asia bucked the trend as prices rose over 40% in Shanghai (+52%), Beijing (+47%) and Hong Kong (+40.5%).
“Some are now predicting that another serious bubble [in China] is starting to emerge, although it appears that prices can be sustained at current levels,” said Liam Bailey head of residential research, Knight Frank LLP in a statement on March 25. “We will begin to get more concerned if growth does not start levelling off at some point in 2010,” he added.
Dubai’s prime home prices fell the most last year among the 56 cities tracked by the index. It took a massive dip of -45% followed by Dublin (-25%). “Most locations around the world recorded price falls. The hardest hit were those such as Dubai and Dublin that really soared at the height of the property boom that preceded the credit crunch.”
The report establishes that the world’s emerging economic powerhouses such as Asia-Pacific (+17.1%) and South America (+7.8%), are experiencing earlier market recovery than the traditional areas of wealth like Europe (-12%) and North America (-7.7%).
The index was released together with the Wealth Report 2010, a collaboration between the global property consultancy and Citi Private Bank, a global financial services and wealth management company.
“This year, we expect positive annual growth in many more locations. We are already seeing prime property prices recovering in places like New York as confidence returns to the market,” Bailey said. “Those markets that could continue to struggle for a while longer are those like Dubai that were primarily driven by investors, and those like Dublin where the credit crunch still continues to bite.”
The index’s results are based on a structured basis, capturing changes in capital values, rents and yields.
