Prime International Residential Index Q2 2008


Date: 23rd September 2008  | PDF Version

Key highlights


Liam Bailey, head of residential research, Knight Frank, commented: “Monaco and London both vie for the top spot in the global housing market stakes. With the prime market in London taking a hit from the credit crunch fallout, London has now slipped into the second position, with prices for the best properties averaging £3,290 psf, compared with £3,760 psf in Monaco. However, these averages hide the fact that prices in both locations have broken records in recent months, with the £5,000, £6,000 and even £7,000 psf barriers surpassed by new build and refurbished properties.

“Against the backdrop of the credit crunch why has this super £10 million+ sector remained so strong? Despite the credit crunch, extraordinary wealth creation has continued until recently across the global oil and commodity sectors; the financial markets have taken a significant turn for the worse and will drag down the performance of the prime markets over the next 12 months. Recent falls in energy and commodity prices also point towards a weakening in wealth generation from these sectors in future months.

“The dislocation of London and Monaco’s top end market has been reflected in the only other true global super-prime market, Manhattan. Whereas prices in the US are still falling, prices for prime Manhattan properties rose 12.3% in the year to June, although indications are that the market is weakening through Q3.

“Does the divergence of performance mean we are close to the peak of the super-prime market? Our view is that fundamental economic arguments point to continued support for this sector. Demand is not going to evaporate, wealth creation and accumulation in emerging economies and in specific high end service sector activities will continue. The flight to quality in terms of both location and product we have seen over recent years will remain a constant.”

Knight Frank Prime International Residential Index, Quarter 2 2008

  Location Country Q2 2008 £ psf Q2 2008 Euro per sq m Q2 2008 Annual % change
1 Monaco Monaco 3,762 51000 30.0%
2 London UK 3,291 44620 1.8%
3 Cap Ferrat (Prime Cote d'Azur) France 3121 42320 2.0%
4 Courchevel (Prime Alps) France 2530 34300 -2.0%
5 New York USA 2486 33705 12.3%
6 Moscow Russia 1256 17031 18.4%
7 Tokyo Japan 1214 16455 -9.4%
8 Hong Kong China 1185 16065 27.2%
9 Sydney Australia 1090 14782 4.0%
10 Paris France 1026 13910 0.0%
11 Singapore Singapore 888 12035 7.8%
12 Barbados Barbados 633 8585 0.0%
13 Florence Italy 632 8571 -8.0%
14 Bermuda Bermuda 533 7225 0.0%
15 Dubai United Arab Emirates 465 6300 52.6%
16 Dublin Ireland 418 5670 -16.7%
17 Sao Paulo Brazil 249 3381 0.0%
18 Brussels Belgium 223 3021 5.0%
19 Beijing China 205 2784 43.1%
20 Shanghai China 194 2631 23.1%

(Source: Knight Frank:September 2008)

For further information, please contact:

Liam Bailey
Residential Research Knight Frank
+44 (0)20 7861 5133
+44 (0)7919 303 148
liam.bailey@knightfrank.com

Niki Riley
Press Office, Knight Frank
+44 (0)20 7861 5037
+44 (0)7769 695088
niki.riley@knightfrank.com

Ends

Notes to Editors
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Knight Frank, operate from 196 offices, in 38 countries, across six continents. More than 6,770 professionals handle in excess of US$700 billion (almost £355 billion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com.


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