Lisbon registers the highest growth among the 30 cities analysed 

Amsterdam, Madrid, Athens and Dubai complete the Top 5

According to Savills latest study “Prime Residential World Cities”, the value of prime residential property in various cities around the world remained resilient during the first half of 2024, recording an average growth in value of 0.8% and surpassing the 0.6% growth forecast for 2024 as a whole.

60% of the thirty cities analysed recorded growth in value, reflecting confidence in this asset class. Although seven cities reported price falls of less than -1%, the solid foundations of the prime residential markets may allow for the possibility of appreciation in the second half of the year in these locations. However, some buyers remain cautious pending further information on interest rates.

Year-to-date, cities in Southern Europe and the Middle East recorded the strongest growth in value during the first six months of 2024. Lisbon leads the way with a 4.2% rise in the first half of the year. Amsterdam, Madrid and Athens recorded value increases of more than 3% and Dubai completes the Top 5 with a growth of 2.9% in the first six months of the year.

Across the EMEA region, only two of the 13 markets recorded negative value growth in the first half of the year. Berlin and London recorded slight price drops of -0.8% and -0.1% respectively. In Berlin, an increase in the supply of prime properties in some neighbourhoods, without a corresponding increase in demand, led to downward pressure on prices.

In many places in Europe, especially in the southern countries, where a lack of supply is driving up property prices in the prime residential market, American buyers have become a key potential buyer base, thanks to a comparatively strong dollar and a growing interest in the lifestyle of these cities.

In the US, persistently high interest rates have led the property market to stagnate. The prevalence of the 30-year fixed-rate mortgage means that few are willing to enter the property market, especially if their current mortgage is fixed at a low rate. As a result, prime residential property prices fell in three of the four US cities monitored, with only San Francisco recording positive value growth of 0.7% in the first half of the year.

The Asia-Pacific markets recorded a more varied performance. Bangkok, Sydney and Mumbai recorded growth of more than 2.5% in the first six months of 2024 due to high levels of demand combined with limited supply. Tokyo also reported a price growth of 1.6%.

The prime residential market in several Chinese cities continues to feel the impact of government measures to support the property markets, but overall it has done little to change buyer confidence. Transactions in the five cities analysed remained down during the first half of the year, with only Shanghai registering positive value growth of 0.1% during this period. In Hong Kong, the withdrawal of some measures boosted conventional market sales, but prime sales remain weakened by high interest rates, which are linked to the US Federal Reserve's interest rates and the smaller number of buyers from mainland China. As a result, values fell by -1.1% during the first half of the year.

Alexandra Portugal Gomes, Head of Research at Savills, emphasises: “Lisbon continues to have a high demand for prime properties, mainly from international buyers, which has led to their appreciation. The fact that the country’s capital was the city where prime property appreciated the most in the first half of 2024 shows that it is still a very attractive market and everything indicates that demand will continue to be very strong until the end of the year.”

Kelcie Sellers, associate director, Savills World Research, comments: “Looking ahead, we forecast an average value growth of 0.5% for the second half of the year, which would bring the total growth for 2024 to 1.3%. The current gap between supply and demand for high-end residential products is projected to drive price growth in European cities such as Amsterdam, Lisbon and Barcelona, where growth of between 2% and 3.9% is expected in the second half of 2024.”