Global super-prime residential sales of properties costing at least $10 mln (€9.2 mln) rose 11% in Q4 2023 on a year-on-year basis with London and Geneva named as among top markets.
According to Knight Frank's latest Prime Global Cities Index, there were 411 sales across 12 markets covered in the three months to December compared to 370 in the same period in 2022.
The largest market in Q4 was Dubai (108 sales), followed by London and New York with 52 each. Hong Kong volumes dipped to 15 sales, pushing it out of the top five markets for the first time. Sydney and Geneva ranked fourth and fifth, respectively, with strong activity throughout the quarter.
Although super-prime sales rose in Q4, pushing 2023’s total sales ahead of 2022, they were still 22% lower than the levels reached in 2021. However, the total was still significantly higher than the pre-pandemic level seen in 2019.
The total value of super-prime sales reached $31.9 bn in the year ending December 2023. This was a 22% decrease from the $40.7 bn peak during the 2021 pandemic property boom.
Liam Bailey, global head of research at Knight Frank said: '2023 was a pivotal year for global super-prime markets, while rates continued to climb in the first half of the year, wealth creation rebounded as asset prices surged on the back of the AI -fuelled equity boom, which was then supported in the final quarter by expectations of lower rates. 2024 is likely to be defined by the eventual pivot to lower debt costs which will boost activity in key global super-prime markets.'
Average annual prices increased 3.7% over the 12-month period to December. This is the strongest performance since Q3 2022 and is within touching distance of the long-run trend rate of growth.
Although 82% of markets experienced price increases over the past 12 months, only 64% witnessed growth in the last three months, indicating continuing volatility in certain cities.
Manila tops the ranking with a robust growth rate of 26.3%. This increase is driven by rising housing demand, with agents reporting a surge in requirements from expatriates as the economy shows strong performance. Dubai is next with growth of 15.1%, however the rate of appreciation has slowed noticeably after an extraordinary repricing over the past three years, during which prices rose by 182%.
In the US, the property market is experiencing a significant divergence. Los Angeles witnessed sharped recovery, with a prince increase of 8.2% over the year. Miami also showed healthy growth, recording a 6.5% increase over the year. In contrast, New York experienced a decline in prices, falling 3.3% over the year.
Bailey said: 'The biggest impact of the rate tightening cycle in the past 12-months has been on sales volumes, which have fallen in most markets by around 10% to 20%. While prices did initially fall as rates rose in 2022, as supply has been squeezed prices have ticked up. Rate cuts in the second half of 2024 will add further impetus to the market.'
