KUALA LUMPUR (April 5): Political uncertainties and a subdued market have caused luxury home values to dip by 0.7%, according to the Prime International Residential Index (PIRI) 100, which is part of the 12th edition of The Wealth Report by independent global property consultancy Knight Frank launched today.
The PIRI 100 tracks the movement of luxury residential prices in the world’s top 100 cities and second home markets, including 20 destinations from Asia Pacific.
“As we know, Malaysia has seen political uncertainties and the market has been slow in these few years and the growth has been quite flat,” said Knight Frank Asia-Pacific head of research Nicholas Holt at a media conference today.
Guangzhou takes the top spot with an annual price change of 27.4%, followed by Cape Town (19.9%) and Aspen (19%).
Guangzhou topped the PIRI 100 in 2017 as the city’s prime residential prices closed in on those of Beijing and Shanghai, in line with the trend of stabilising prices in other Tier-1 Chinese cities and despite continued cooling measures, said the report.
Meanwhile, Australasia remains the top-performing region for the third consecutive year, with an annual price change of 7.1%.
The report noted that while a number of cooling measures have been implemented, the growth in values may be driven by investor appetite and the relative lack of prime residential properties in Sydney.
Sydney and Melbourne lead the Australasia region, coming in at the 9th and 14th ranking on the PIRI 100 respectively.
Holt also noted several locations in Europe such as Amsterdam (4th), Frankfurt (6th) and Madrid (10th), reflecting investors’ confidence in the European property market.
Meanwhile, the report also churned out the PIRI Pagoda Index, which explores how many square metres that US$1 million can buy in 20 key cities around the world in 2017.
Monaco emerged as the most expensive global city to buy luxury residential property, where US$1 million can only buy you 16 sq m of accommodation — essentially a toilet, said Holt.
It was followed by Hong Kong (22 sq m) and New York (25 sq m, for new developments only). Data churned by the research team from Knight Frank Malaysia saw Kuala Lumpur being able to secure 199 sq m of accommodation space with US$1 million.
This is owing to political uncertainties and a subdued market.