Soaring Property Prices Experiencing Swiftest Growth Since 2008's Market
Top Cities and Regions Show Strong Growth in Prime Property Prices in 2021
According to the Knight Frank Prime International Residential Index (PIRI), several cities and regions demonstrated significant growth in prime residential real estate prices in 2021. Among the standout performers were Dubai, Manila, The Bahamas, Algarve, and Cape Town.
Manila led the pack with a staggering 26% increase in luxury property prices, followed closely by Dubai with nearly a 16% increase. The Bahamas saw a 15% increase, while both the Algarve and Cape Town recorded a 12.3% increase.
Out of the 100 global markets analysed by the PIRI, 80 showed stable or positive annual price growth, indicating a broad strength in prime residential markets.
Dubai's prime residential property values, including prestigious areas like Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island, saw unprecedented growth starting from a relatively low price base, boosting its standing among the top performers.
While specific rankings or figures for London, Kuala Lumpur, and other major cities were not available for the year 2021 in the sources, Dubai's strong performance and Manila's leadership in price growth stand out as the key highlights from Knight Frank's 2021 data.
Asia averaged 5.5% growth in prime property prices, with the rebound of bustling urban centers that struggled during the pandemic being evident in the 2021 Knight Frank Prime International Residential Index. Europe, the Middle East, and Africa saw a growth of 7.2% in prime property prices.
In 2020 and 2021, suburban, beach, and resort markets saw the strongest growth, with buyers seeking more space and wellness options. Asia-Pacific outpaced EMEA with 7.5% growth, largely due to strong performance in Australasia.
Looking ahead to 2022, key themes to watch include agents complaining about stock shortages, buyers complaining about rising taxes and cooling measures, and the return of demand for city markets. Liam Bailey, global head of research at Knight Frank, predicts that the luxury housing boom will continue in 2022.
The Knight Frank Prime International Residential Index found an average growth of 8.4% in prime property prices globally in 2021, the highest annual growth since the report's launch in 2008. The Wealth Report, which includes the Knight Frank Prime International Residential Index, was shared with Spear's ahead of time.
Dubai topped the list with a 44.4% growth, with sales above $10 million representing 7% of total sales in 2021. The growth in prime property prices was attributed to increasing high net worth and ultra-high net worth populations, low interest rates, and shortages in prime property stock in key cities.
North America was the top-performing region, accounting for six of the top 10 performing cities and regions. Asian cities are expected to see comparably modest growth. The UAE's handling of the pandemic, vaccine delivery, high-end turnkey projects, new visa initiatives, and economic reforms boosted Dubai's appeal to international buyers.
[1] Source: Knight Frank's 2022 Wealth Report
- The luxury property market in Manila displayed an impressive 26% increase in prices in 2021, placing it at the forefront of global growth.
- Dubai followed closely, with a nearly 16% increase in prime property prices, making it one of the standout performers in the year.
- Investing in wellness options and seeking more space were the key drivers behind the strongest growth in suburban, beach, and resort markets in 2020 and 2021.
- The Knight Frank Prime International Residential Index revealed an average growth of 8.4% in prime property prices worldwide in 2021, marking the highest annual growth since the report's inception in 2008.
- The wealth report, which includes the Knight Frank Prime International Residential Index, identified Dubai as the top-performing city, with a stunning 44.4% growth in prime property prices.
- Asia-Pacific regions outpaced Europe, the Middle East, and Africa, averaging 7.5% growth, primarily due to strong performance in Australasia.
- Liam Bailey, global head of research at Knight Frank, anticipates that the luxury housing boom will persist into 2022, with key themes such as dwindling stock, rising taxes, and cooling measures impacting the market.
