Major cities experience jump in residential property growth
Residential housing prices for prime properties in some of the world's top cities grew at their strongest rate since the end of 2010, according to a report from Knight Frank, an independent global residential and commercial property consultancy.
While stable markets are a positive, the rising prices represent an increased corporate relocation cost for many companies. This growth was cited in Knight Frank's Prime Global Cities Index, which noted an increase of 1.4 percent during the second quarter compared to the first three months of the year. In addition, overall prices rose by approximately 3.5 percent during the year ending in June.
When examining regional figures, property prices in the cities tracked in Europe rose 1.3 percent from the second quarter in 2011 to the second quarter this year, the report stated. This was much improved from the end of the first quarter, which showed a 3.4 percent decline in growth. London experienced a 10.5 percent annual growth rate in June, while Geneva and Zurich followed with gains of 6 and 5.9 percent, respectively.
In addition, Bangkok finished with the highest growth in the index with prices spiking nearly 30 percent in the past year. The Asian market as a whole experienced a total gain of 3.4 percent in prime prices.
"The appeal of cities in stable economies is being brought into marked contrast with the investment environment in weaker countries," said James Price, member of the International Development team at Knight Frank. "This city-level data should not, however, be taken as a reflection of the whole country; prime second-home destinations outside the cities may still perform well in a poorer performing wider market."
Despite the gains, future growth may not be expansive, as there is still a great deal of uncertainty in both Europe and Asia, according to the report. The economy is still struggling significantly in the wake of the recession in these regions.
With many areas still trying to make improvements in their economic situations, the world's top cities remain stable places for growing businesses Cities less affected by significant economic hardship are leading locations for significant expansion.
Filed under: International Relocation Services