Kelsey Sellers, an associate at Savills World Research, said: “Inflationary pressures are likely to ease over time, necessitating a ‘prolonged period of high interest rates’ and a continued global economic downturn.”
Other cities expected to see prices fall this year include London, New York, San Francisco, Los Angeles and Seoul. Capital value growth in these cities is expected to be slower than in 2023.
Although prime residential real estate is less dependent on mortgages than mainstream residential real estate, sentiment is expected to deteriorate due to deteriorating macroeconomic conditions. As a result, many potential buyers and sellers may adopt a wait-and-see approach in a high interest rate environment.
At the peak of hardship: Hong Kong’s luxury property owners resort to expensive private loans
At the peak of hardship: Hong Kong’s luxury property owners resort to expensive private loans
Late last year, Hong Kong reversed a series of real estate cooling measures it had implemented since late 2010 in a bid to revive its moribund housing market. This includes halving the stamp duty for non-permanent residents to 7.5%, and waiving the special stamp duty of about 10% of the house price for owners who resell their properties from three years in advance to two years later. was included.
However, the market remains weak due to rising mortgage rates, and is likely to remain high until at least the second half of the year, when the Federal Reserve moves to reduce borrowing costs.
But market observers say the softening market presents an opportunity for the wealthy to buy real estate in prime locations.
“Wealthy families will take advantage of this opportunity to invest for the next generation,” said George Tan, managing director of Live There Residential at Savills Singapore.
Singapore’s luxury housing market was affected by the 60% tax on foreign buyers, but “relatively low supply in this segment allows the market to find a price floor, and over time it will become more It will give us a strong foundation,” said Alan Chong, head of research at Savills Singapore.
He added that prices are likely to stabilize soon as new supply in the city’s luxury housing market declines after 2025.
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How Hong Kong’s housing market became the most affordable in the world
How Hong Kong’s housing market became the most affordable in the world
In mainland China, prices in Guangzhou, Hangzhou and Shenzhen will fall throughout the year, Savills said.
Sydney and Dubai are expected to be the top two this year, with both cities set to benefit from a growing affluent population.
Mr Savills said demand for high-quality luxury homes was growing in Sydney, but supply remained low. This imbalance is likely to continue until 2024, pushing prices up from 8% to 9.9%, where he is predicted to rise.
Growth in prime real estate prices in Dubai, which rose 17.4% in 2023, is likely to slow this year as real estate consultancies expect market activity to return to normal. Savills says prices are expected to rise between 4% and 5.9% this year.
In general, markets with lower price points compared to other cities around the world are likely to perform well throughout the year.
Savills said Cape Town, Barcelona, Madrid and Kuala Lumpur, each with prices under $800 per square foot, are expected to have the highest growth after Sydney and Dubai.
Additional reporting by Post