This is compared to growth of 0.8% in H2 2022. To June 2023, year-on-year growth is 1.9%, the slowest annual growth since December 2020, as uncertainty surrounding current market conditions has led to caution amongst some buyers and sellers.

London saw flat price growth over the course of the first half of the year as consumer sentiment was dampened by high interest rates and inflation. Other European cities, such as Paris, Berlin, and Amsterdam, have all seen slower growth by comparison. Buyers are less active amidst rising interest rates and a lack of highquality stock. Scarce supply is fueling price growth, on the other hand, in Sydney (+3.3%), Barcelona (+2.8%) and Madrid (+2.2%), each attracting wealthy buyers despite rising interest rates. The highest capital value growth was seen in Dubai, with growth of 11.2%.

Other cities with higher levels of capital value growth include Mumbai, Cape Town, and Bangkok all of which saw capital values grow more than 3% in the first half of 2023. These cities are returning to pre-pandemic pricing as international buyers return.

For buyers looking in these global cities, the purchase price isn’t the only element that needs to be considered when buying a prime property. There are additional costs to be factored in. London sits firmly mid table, while on the left hand side there are cities with more punitive additional property and foreign buyer stamp duties, such as Singapore and Hong Kong.

Prime residential rents are continuing their run of growth, increasing by 2.6% across the 30 cities in the index during the first six months of 2023. Several factors contributed to this upward trend, including the scarcity of available high-quality rental properties and the preference, for some, to ‘try before they buy’. Lisbon and Singapore saw the strongest rental growth among global cities, each recording increases of more than 13% in the first half of this year as international tenants drive demand for prime residences.

Like London, rising interest rates and weak economic outlooks are weighing on consumer sentiment and pushing ever more tenants into the rental markets in major world cities. As supply was already limited, the surge of renters who are would-be buyers has made the market hotter than ever.

For the rest of the year, we expect these trends to continue globally. Supply of rental stock is expected to remain tight in many world cities. Several factors, including rising construction costs, development challenges, and increasing debt costs, contribute to the limited availability of prime inventory and the upward pressure on rental prices.

The outlook for capital values remains muted, on average, across our 30 World Cities, our prime capital value forecast for the remaining six months of 2023 stands at 1.1%, on par with the 1.1% recorded in the first half, albeit up on the 0.8% achieved in H2 2022.