High-rise buildings along central Sheikh Zayed Road in Dubai on July 3, 2023.

Karim Sahib | Afp | Getty Images

Luxury home prices in Dubai rose nearly 50% over the year to June, according to a new report from Knight Frank, defending their top spot for the eighth straight quarter.

Prices in Dubai are up 225% since hitting a pandemic low in the third quarter of 2020, according to data from the real estate consultancy released on Wednesday. The emirate maintained its top spot in the rankings for the eighth consecutive quarter.

Tokyo followed in second and third place with an annual increase of 26.2% and Manila with an increase of 19.9%.

Other notable gains included China’s Shanghai, up 6.7%, and Singapore, up 4.2%.

“The influx of expatriates to Singapore, fueled by the thriving financial and professional services sectors, has impacted the rental market more than the sales market,” the report said, noting that the discrepancy is partly due to taxation was due to purchases by foreign buyers.

Since the end of April, foreigners buying residential property in Singapore have had to pay an additional 60% buyer stamp duty, double the previous rate.

Prices in Hong Kong fell 1.5% over the past year due to an increase in unsold inventory from newly developed projects. To spur demand, the Hong Kong government raised the mortgage loan-to-value ratio for residential properties worth HK$15 million (US$1.9 million) or less to 70%.

However, Knight Frank analysts said that while the change is likely to be welcomed by buyers, the ability to “significantly boost” growth as a result is still uncertain.

Other falls include New York, down 3.9%, and San Francisco, down 11.1%. Germany’s Frankfurt was at the bottom of the list, down 15.1%.

Overall, average annual prices across the 46 markets in the Knight Frank Prime Global Cities Index rose 1.5%.

“Global real estate markets are still under pressure from the shift to higher interest rates,” said Liam Bailey, global head of research at Knight Frank.

However, he noted that the index’s results are confirmation that prices are being supported by strong underlying demand, weak supply as new construction projects are disrupted during the pandemic, and the return of workers to cities.

“As uncertainty about the direction of inflation appears to have eased in recent months, pricing adjustments in many markets are likely to be less pronounced than was expected three months ago,” Bailey added.

Source : www.cnbc.com

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