Dubai tops global super-prime rankings despite Q3 slowdown

Transactions in the global super-prime market (US$10 million+) slowed in the third quarter as a thinner pipeline moderated deal flow. 

Across our 12 key markets, we tracked 474 transactions, down 21% quarter-on-quarter, with an aggregate sales value of US$8.5 billion, down 29%. Dubai retained its global lead by both deal count and value, while New York and Los Angeles remained the next largest markets.

Quarterly volatility is a feature of the super-prime segment. The quarter's slower print follows a surge in Q2 and reflects politics (New York), taxes (London), and limited stock (Dubai) conspiring to weigh on activity. Strong results in the first six months of the year lifted the annual total to 2,185 sales, the highest since the post-pandemic boom in 2021, when there were 2,328 sales. The total value of sales over the past twelve months reached US$40.4 billion.

Lower-ticket trades

Despite a 28% fall in sales compared to the previous quarter, Dubai remained number one in both sales volume and value, with 103 transactions totalling US$2.0 billion. New York ranked second by deal count (74, -38% QoQ) and third by total value (US$1.19 billion, -59% QoQ), reflecting a much quieter summer ahead of the mayoral election following an exceptionally strong spring market. Los Angeles recorded 64 deals worth US$1.25 billion, with fewer top-tier single-family transactions and a notably lower average price than last quarter.

Hong Kong’s market has been rising steadily over the past two quarters, recording 56 sales (+6% QoQ), with total value nudging higher to US$1.04 billion (+4% QoQ). Singapore posted the quarter’s sharpest gain in transactions (36, +44% QoQ), with an aggregate value of US$669 million, up almost 50% on the quarter, pointing to a skew toward lower-ticket trades. London saw volumes fall back noticeably (36 deals, -31% QoQ) as ongoing speculation around property taxes from the UK Treasury over the summer weighed on sentiment, ironically depressing stamp duty receipts at the same time.

Among the US Sun Belt and West Coast markets, Orange County was broadly steady (33 deals, -3% QoQ), Miami softened again (22 deals, -12% QoQ), and Palm Beach saw the sharpest pullback (6 deals, -81% QoQ). Sydney’s market echoed the strength seen across Australia, with 33 deals (+14% QoQ). See the report for more. 

Borrowing costs

UK inflation fell to 3.6% in the year to October, from 3.8% the previous month, according to official figures released this morning. That's the first fall in seven months, though it was a touch higher than the 3.5% economists had expected.

Still, the headline figure matches BoE forecasts, and some of the underlying data will encourage the Bank of England to push on with a December rate cut. Services inflation, for example, edged down to 4.5%, lower than the BoE's forecast.

Whether borrowing costs will continue to ease in the short term is now in the hands of the Chancellor. We got a taste of what's at stake in the upcoming Budget last week, when news that the government had opted not to push on with an income tax hike prompted a sharp rise in gilt yields. More of that will complicate the decision-making process around rate cuts, even in the face of weakening economic growth. 

Not a penny

Whatever happens, the circus around whether the government will try to satisfy the bond markets with a display of fiscal discipline, or the party faithful by sticking to manifesto commitments, has weighed heavily on business activity and tax receipts. 

“We will not invest a penny in the UK in any meaningful form until June after the May elections,” Andrew Coombs, chief executive of Sirius, a UK and German commercial real estate investor, told Bloomberg on Monday. 

In the housing market, metrics for new buyer enquiries and agreed sales both fell in October's RICS survey. Sellers have dropped asking prices by 1.8% during the past four weeks, the largest fall for this time of year since 2012, Rightmove reported on Monday. Crest Nicholson told investors yesterday that it expects full-year profits to be at the low end, or marginally below its initial guidance of £28–38 million.

The figures reflect "a housing market that has remained subdued through the summer, and the continued uncertainty surrounding Government tax policy ahead of the forthcoming Budget," said chief executive Martyn Clark. 

In other news...

Property tax rises threaten serviced offices, chancellor told (Times), Housebuilding around train stations will be given default “yes” (Government), Landsec half-year results (Investegate), GPE half-year results (Investegate), and finally, Swiss set to reject inheritance tax on super rich, poll shows (Bloomberg).