Luxury price growth slowed worldwide in Q3 — here’s why
Luxury price growth slowed worldwide in Q3 — here’s why
Vancouver could lose the top spot to steaming Chinese markets
Nearly half of the cities that Knight Frank tracks in its Prime Global Cities Index experienced decelerating growth last quarter.
From Vancouver to Melbourne, luxury residential prices posted shorter increases than usual due to cooling measures instilled by their governments to calm down roiling prices, the report noted.
Those cooling measures seem to be having its greatest effect on the index’s top-rated city, Vancouver, which recorded a price growth of only 1.5 percent between the second and third quarters.
Knight Frank attributed the slowdown to the 15-percent tax levied on foreign purchasers as well as discussion of more taxes on vacant homes in 2017.
More: Vancouver home sales fall — should the new tax on foreign buyers take credit?
Other cities on the top 10 — Toronto, Sydney and Melbourne — also saw diminishing price growths due to the imposition of new property curbs in the past year, Knight Frank also noted. Such cities have imposed higher stamp duties and additional taxes on foreign buyers as well as closed tax loopholes for non-residents.
Vancouver looks poised to cede its position in the next quarter’s index to Shanghai, which posted an annual price growth of 23.4 percent, followed by Guangzhou (14.3 percent) and Beijing (7.1 percent). However, such brisk clip of growth may change in coming months as the Chinese government continues to announce, at short notice, a range of measures to temper demand.
Meanwhile, political uncertainty brought about by the US presidential elections and the Brexit carnage has compelled buyers to take a “wait-and-see” approach, Knight Frank added.
London luxury prices sagged by 2.1 percent in the year to September. Across the Atlantic, sales activity has in New York City have moderated, although average Manhattan apartment values exceeded the USD2m earlier this year.
The Prime Global Cities index increased by 3.8 percent in the year to September 2016, down from 4.6 percent in the previous quarter.
Read next: How the Chinese are reacting to Vancouver’s property tax hike
Source: Property Report