Property values in the luxury residential market saw unexpected increases throughout 2023, as reported by Knight Frank in its Wealth Report.
Among the 100 regions monitored in Knight Frank’s Prime International Residential Index (PIRI), 80 saw either stagnant or positive yearly growth.
Luxury property prices escalated by an average of 3.1% in 2023, marking a notable overall increase.
Leading the rankings was Manila (Philippines) with a 26% surge, while Dubai (16%), which held the top position in 2022, slipped only one spot.
The Bahamas (15%) secured third place, followed by the Algarve (Portugal) and Cape Town (both 12.3%), completing the top five.
The Asia-Pacific region (3.8%) outpaced the Americas (3.6%) as the top-performing global area, with Europe, the Middle East, and Africa trailing behind (2.6%).
Locations with abundant sunlight continued to outshine urban and ski markets, with an average increase of 4.7%. Ski resorts followed closely at 3.3%, while prime urban property prices rose by an average of 2.7%.
“Along with rising prices, we have also seen an increase in the number of properties that have traded in the prime market,” said Nick Gaertner, Director and COO of Knight Frank South Africa.
“The favourable currency for foreigners, as well as unmatched value for money lifestyle continues to attract both local and international buyers to Cape Town.”
“With the city being well managed relative to the rest of South Africa, together with its prime location regarding its proximity to some of the world’s best known winelands, mountain trails and Blue Flag beaches, the influx of buyers and resulting upward price shift is expected to continue for the foreseeable future.”
“As wealth portfolios recovered in 2023, affluent buyers targeted residential property in the world’s luxury markets. While 24% of global UHNWIs were active in the market, inventory was down by almost a third, adding upwards pressure to prices,” said Liam Bailey, global head of research at Knight Frank.
According to the Seeff Property Group, the luxury property market above R20 million saw solid growth in Cape Town in 2023. It said that at least 100 property sales of more than R20 million were concluded in the City of Cape Town, totalling more than R3 billion in value.
Knight Frank offers an annual guide detailing the square footage available for US$1 million in various markets, showcasing significant variations in prime property prices across luxury residential sectors.
While prime prices in Dubai have risen by 134% since the onset of the pandemic, they remain notably lower than more established markets, with US$1 million buying 91 sq metre, four times the equivalent space in Hong Kong.
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