From Shanghai to San Francisco, Los Angeles to Lisbon buyers are demonstrating their desire for prime city property as markets around the world chalk up the fastest growth since 2016. 

From the summer of 2018 to the end of last year, capital values across the 30 cities in our World Cities Index grew by an average of just 0.7 per cent as a result of global uncertainty, tax and policy changes in many locations and, of course, the pandemic.

But in the first half of 2021, the resilience of these markets has shone through with values rising by an average of 3.9 per cent fuelled by a combination of sustained record low interest rates, improved buyer confidence, increased transactions at higher price points, and economic stimulus measures.  As international travels opens up, we anticipate more buyers will come forward and, although a degree of covid-related uncertainty remains, we anticipate economic recovery will boost confidence and demand still further this year.

Not all cities performed equally over the past six months.  Over 70 per cent of the locations had positive capital value growth while the cities which posted negative growth are unified in their historical reliance on international buyers in their prime markets, a segment which has been severely limited by travel restrictions. 

Price rises in China have accelerated in 2021 despite the tightening of financing and local policy changes in an attempt to cool the markets.  Lending-fuelled purchases have been driving this property price growth in recent years, with buyers believing property is likely to remain the safest investment in China.

In the United States, Los Angeles and Miami lead with growth above 9% in the first half of 2021. Miami has benefited from domestic migration to the city as a result of increased remote working, favourable local taxes, an influx of tech and finance companies, and the enhanced buying power from low interest rates.

Some cities have seen price changes go from negative to positive territory. Singapore, Bangkok and Kuala Lumpur all benefited from increased demand for decreased supply, while the work from home boom and resulting increased need for space helped to push up capital values in Dubai, Cape Town, Moscow and Lisbon.

Further information

Contact Kelcie Sellers

Read the full Savills Prime Index: World Cities report