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Shanghai, Beijing and Guangzhou topped PIRI 100 – all exceeding 26% year-on-year growth in 2016

17 April 2017

Malaysia, 13 April 2017 – Knight Frank, the independent global property consultancy, today launches the 11th edition of The Wealth Report that includes the Prime International Residential Index (PIRI) tracking the value of luxury homes in 100 key locations worldwide, including 19 destinations from Asia-Pacific. 

Index performance

·         On average, values rose globally by 1.4% in 2016, compared with 1.8% in 2015.

 

·         The PIRI 100 also reveals a huge gap of 49 percentage points between the top and bottom ranking, up from 45 in 2015.

 

·         Of the locations tracked by PIRI, 61% recorded flat or rising prices in 2016, down from 66% the year before.

 

·         Based on results from 2016, the value of a city-based luxury home increased by 2.4% on average, a ski home by comparison saw 1.9% growth, and a beach or coastal property slipped marginally by 0.5%.

 

Dominic Heaton-Watson, International Project Marketing, Knight Frank Malaysia, comments, “Wealth creation and resulting cross-border flows have continued to shape prime property markets in 2016, with security concerns, currency movements, education and even healthcare also emerging as influential market drivers. Interestingly, changes to stamp duty rather than the EU referendum led to a slowdown in the UK’s Prime Central London market, but the final quarter of 2016 saw activity strengthen once again. As for the US, New York had its challenges in 2016 – the strong US Dollar negated some overseas interest and the delivery of a number of luxury projects helped inflate supply.”

 

Kate Everett-Allen, Partner, Residential Research at Knight Frank, says, “This year’s PIRI results highlight two key points. First, local economic activity has a strong bearing on price performance (all of this year’s top 10 rankings report 3% or more in annual GDP growth). And second, economic growth is firmly concentrated in the world’s cities (22 of the top 25 PIRI rankings are occupied by cities).”

 

Key cities performance

 

·         Asia, the second best performing world region saw prices rise by 5.1%. 

·         China’s cities have catapulted themselves up the rankings with Shanghai (27.40%), Beijing (26.80%) and Guangzhou (26.60%) claiming the top three slots, all exceeding 26% year-on-year growth.

o    Shanghai has climbed two notches from third to take the top ranking in the index, displacing Vancouver (14.5%) down to 7th place; Beijing and Guangzhou, both with significantly lower growth during the two previous years have been catapulted into the top three reflecting the strength of the Tier-1 Chinese market in 2016.

 

·         Australasia was the strongest performing world region with prices rising by 11.4% year-on-year.  Auckland leads the way for Australasia with a prime price rise of 16.00%.  Sydney and Melbourne also showed strong growth with increases of 9.30% and 8.80% respectively year-on-year.

 

·         Hong Kong’s price growth was stronger than in previous years with an annual price change of 2.10%. Performance was stilted however due to a new 15% stamp duty rate which residents now face.

 

 

PIRI by world regions

Breakdown by world region

Annual % change

(December 2015 to December 2016)

Australasia

11.4%

Asia

5.1%

North America

4.5%

Europe

0.5%

Caribbean

-0.3%

Latin America

-2.7%

Middle East

-3.3%

Africa

-3.4%

Russia/CIS

-5.5%

Sarah Harding, Head of Residential for Asia-Pacific, Knight Frank Asia Pacific, highlights, “The strong performance of Australasia’s prime residential market continues to reflect, amongst other aspects, the liveability and lifestyle conditions offered by many of the Antipodean cities. Partly supporting this has been strong interest from Asia, with our Attitudes Survey notably showing 48% of Malaysian UHNWIs likely to own a home in Australia. The strong demand in these cities fuelled by population growth and tight supply is likely to underpin performance going forward.” 

 

Nicholas Holt, Head of Research for Asia Pacific, Knight Frank Asia Pacific, says, “Prime residential markets across Asia-Pacific showed significant divergence in terms of performance in 2016. Tier-1 Chinese cities dominate the top of the PIRI rankings, with their residential markets seeing extremely strong price growth – to such an extent that policy makers have continued to intervene in the markets with the aim of cooling the markets off. 

“Elsewhere in Asia, the story is more mixed. In the case of Southeast Asia, a mixture of sluggish economic growth, existing cooling measures and significant supply continued to make for weak performance in Singapore and Kuala Lumpur; while in Jakarta and Bangkok – two of the region’s previous strong growth markets – there has seen a slowdown in activity. In India, in contrast to a strong commercial market, the prime residential market continues to be slow with weaker sentiment keeping a lid on pricing.”

 

Most expensive prime residential – the square metres of prime property US$1m will buy 

·         The top four, Monaco, Hong Kong, New York and London, jostle for position each year. The gap between this tier and the rest of the pack is significant, regularly exceeding 12 sq m or, in monetary terms, US$10,000 per sq m. 

·         Monaco has held on to the top spot for the tenth consecutive year – and values have remained largely static. At the end of 2016, US$1m would have bought a diminutive 17 sq m in this exclusive 2 sq km enclave, much the same as in 2010. 

·         New York (26) and London (30) have regularly switched positions over the years, but the strength of the US dollar and softening prices in prime central London in 2016 have enabled New York to edge ahead.

 

The square metres of luxury property US$1m will buy around the world (As at Dec 2016)

Rank

 City

 Square Metres

1

 Monaco

                                    17

2

 Hong Kong

                                    20

3

 New York

                                    26

4

 London

                                    30

5

 Geneva

                                    42

6

 Singapore

                                    43

7

 Shanghai

                                    46

8

 Paris

                                    55

9

 Beijing

                                    58

10

 Sydney

                                    59

Rank

 City

 Square Metres

11

 Los Angeles

                                    61

12

 Miami

                                    79

13

 Berlin

                                    87

14

 Tokyo

                                    91

15

 Mumbai

                                    99

16

 Istanbul

                                  102

17

 Melbourne

                                  110

18

 Dubai

                                  162

19

 Sao Paulo

                                  176

20

 Cape Town

                                  209


Source: Knight Frank Research, The Wealth Report 2017 (Pg 33) 

Notes: Price ranges for Hong Kong, Beijing and Shanghai are for properties considered "super-prime". Prices used in the calculation for Hong Kong are based on apartments only. All currency calculations are based on the prevailing rate on 30 December 2016 (last trading day).

 

END

 


Footnote to editors: 

The PIRI 100

 

Rank

Location

World Region

Annual % change

(December 2015 to December 2016)

 
 

1

 Shanghai

 Asia

27.40%

 

2

 Beijing

 Asia

26.80%

 

3

 Guangzhou

 Asia

26.60%

 

4

 Seoul

 Asia

16.61%

 

5

 Auckland

 Australasia

16.00%

 

6

 Toronto

 North America

15.10%

 

7

 Vancouver

 North America

14.50%

 

8

 Amsterdam

 Europe

10.10%

 

9

 Gstaad

 Europe

10.00%

 

10

 Seattle

 North America

9.70%

 

11

 Sydney

 Australasia

9.30%

 

12

 Melbourne

 Australasia

8.80%

 

13

 Berlin

 Europe

8.70%

 

14

 Cape Town

 Africa

8.30%

 

15

 Munich

 Europe

8.00%

 

16

 Barcelona

 Europe

6.60%

 

17

 Los Angeles

 North America

5.30%

 

18

 Stockholm

 Europe

5.00%

 

19

 Frankfurt

 Europe

4.50%

 

20

 Val d'Isere

 Europe

4.00%

 

21

 San Francisco

 North America

3.78%

 

22

 New York 

 North America

3.50%

 

23

 Singapore

 Asia

3.40%

 

24

 Aspen

 North America

3.10%

 

25

 St Barts

 Caribbean

3.04%

 

26

 Chamonix

 Europe

3.03%

 

27

 Western Algarve

 Europe

3.02%

 

28

 Tel Aviv

 Middle East

3.00%

 

29

 Madrid

 Europe

3.00%

 

30

 Mumbai

 Asia

2.90%

 

31

 Dublin

 Europe

2.80%

 

32

 Edinburgh

 Europe

2.60%

 

33

 Ibiza

 Europe

2.51%

 

34

 Chicago 

 North America

2.49%

 

35

 Washington DC

 North America

2.39%

 

36

 Johannesburg

 Africa

2.20%

 

37

 Boston

 North America

2.18%

 

38

 Hong Kong

 Asia

2.10%

 

39

 Mustique

 Caribbean

2.04%

 

40

 Méribel

 Europe

2.03%

 

41

 Evian

 Europe

2.02%

 

42

 Mallorca

 Europe

2.01%

 

43

 The Hamptons

 North America

2.00%

 

44

 Ottawa

 North America

1.30%

 

45

 Paris

 Europe

1.24%

 

46

 Lake Como

 Europe

1.23%

 

47

 Oslo

 Europe

1.22%

 

48

 Cyprus

 Europe

1.10%

 

49

 Jersey

 Europe

1.04%

 

50

 Monaco

 Europe

1.02%

 

51

 Verbier

 Europe

1.01%

 

52

 Vail

 North America

0.90%

 

53

 Phuket

 Asia

0.52%

 

54

 Jakarta

 Asia

0.30%

 

55

 Bangkok

 Asia

0.28%

 

56

 St Petersburg

 Russia/CIS

0.20%

 

57

 Rome

 Europe

0.04%

 

58

 Bali

 Asia

0.03%

 

59

 Buenos Aires

 Latin America

0.02%

 

60

 Riyadh

 Middle East

0.01%

 

61

 Bengaluru

 Asia

0.00%

 

62

 Courchevel 1850

 Europe

-0.50%

 

63

 British Virgin Islands

 Caribbean

-0.99%

 

64

 St Moritz

 Europe

-1.00%

 

65

 St Rémy de Provence

 Europe

-1.49%

 

66

 Milan

 Europe

-1.50%

 

67

 Doha

 Middle East

-1.51%

 

68

 Brussels

 Europe

-1.54%

 

69

 Vienna

 Europe

-1.59%

 

70

 Florence

 Europe

-1.99%

 

71

 Geneva

 Europe

-2.00%

 

72

 Abu Dhabi

 Middle East

-2.03%

 

73

 Mexico City

 Latin America

-2.04%

 

74

 Nairobi

 Africa

-2.10%

 

75

 Cannes

 Europe

-2.20%

 

76

 São Paulo

 Latin America

-2.40%

 

77

 Bahamas

 Caribbean

-2.50%

 

78

 Miami

 North America

-2.70%

 

79

 St Tropez

 Europe

-2.80%

 

80

 Kuala Lumpur

 Asia

-2.87%

 

81

 Marbella

 Europe

-2.90%

 

82

 Barbados

 Caribbean

-2.99%

 

83

 Venice

 Europe

-3.00%

 

84

 Cap Ferrat

 Europe

-3.20%

 

85

 Megève

 Europe

-3.50%

 

86

 Liguria

 Europe

-3.99%

 

87

 Dubai

 Middle East

-4.00%

 

88

 Delhi

 Asia

-4.90%

 

89

 Sardinia

 Europe

-5.00%

 

90

 Lausanne

 Europe

-5.01%

 

91

 Rio de Janeiro

 Latin America

-6.20%

 

92

 London

 Europe

-6.30%

 

93

 Zurich

 Europe

-7.00%

 

94

 Umbria

 Europe

-7.99%

 

95

 Taipei

 Asia

-8.00%

 

96

 Istanbul

 Middle East

-8.40%

 

97

 Tokyo

 Asia

-8.79%

 

98

 Bodrum

 Middle East

-10.00%

 

99

 Moscow

 Russia/CIS

-11.20%

 

100

 Lagos

 Africa

-22.00%

 

Sources: All data comes from Knight Frank's global network with the exception of Tokyo - Ken Corporation; São Paulo - FIPE (Fundação Instituto de Pesquisas Econômicas); Oslo - Torbjørn EK; Boston, Chicago, San Francisco, Seattle and Washington DC - S&P CoreLogic Case-Shiller

 

Notes: Data for Cyprus relates to the period from Jun 2015 to Jun 2016. Data for Aspen, Barcelona, Johannesburg, Los Angeles, Miami, New York, Tel Aviv and The Hamptons relates to the period from Sep 2015 to Sep 2016. Data for Boston, Chicago, San Francisco, Seattle, Washington DC and Ottawa relates to the period from Oct 2015 to Oct 2016. Data for Vail, São Paulo and Rio de Janeiro relates to the period from Nov 2015 to Nov 2016. The price change for Tokyo relates to all properties above JPY100m.

 

 

To download the report, please visit:
http://www.knightfrank.com/wealthreport

 

 

For further information, please contact:

Mr Nicholas Holt, Asia-Pacific Head of Research

nicholas.holt@asia.knightfrank.com +86 10 6113 8030 @nholtKF

 

Ms Rachel Loke, Asia-Pacific Head of Marketing, Communications & Digital

rachel.loke@asia.knightfrank.com +65 6429 3587 @knightfrank

 

Ms Denise Nah, Asia-Pacific Public Relations & Communications Manager

denise.nah@asia.knightfrank.com +65 6429 3599 @knightfrank

 

Ms Seline Soo, Marketing & Communications Manager, Knight Frank Malaysia

seline.soo@my.knightfrank.com +603 2289 9669 @KnightFrank_my

 

 
Notes to editors
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 14,000 people operating from 413 offices across 60 countries. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit knightfrank.com.