Prices boil over in some cities and hot air hisses out of others.

So how is the luxury housing market doing in the top cities around the world, as they’re facing “significant risks ahead in the form of rising debt, inflation, and greater housing market regulation?”

Knight Frank’s Prime Global Cities Index rose 4.8% over the 12 months through March, compared to a year earlier. But the index averaged out the drama playing out on the ground: In some cities, luxury  prices skyrocketed, and in other cities prices dropped sharply.

Seoul ranked number one on the index, with luxury house prices soaring 25% over the 12 months through March. Over the past six months alone, prices soared 20%, despite efforts by authorities to tamp down on these price surges, according to Knight Frank:

Across a large part of the city new macro prudential measures, including new taxes for owners of multiple properties and tighter lending restrictions, are cooling growth, but the prime area of Gangnam is still seeing strong speculative activity.

The ranking of the cities in the index is figured not in terms of absolute prices, but in terms of price growth. The index considers “luxury” those sales whose prices are in the top 5% in that market, except in US cities, where the index uses the “High Tier” index from CaseShiller, and in Tokyo where home sales over ¥100 million are deemed luxury.

The top two US cities are San Francisco and Los Angeles, ranked in 8th and 11th place respectively with price growth rates of 9% and 8% for the past 12 months. Luxury prices are barely ticking up in Miami and are stalling in New York.

Though overall home prices in Sydney and Melbourne are now down from a year ago, according to CoreLogic, as hot air is hissing out of their historic housing bubbles, prices at the luxury end of the market still increased 8.7% and 8.3% respectively – “with supply constraints supporting prime prices.” These price surges put both cities in the top ten.

The opposite is happening in super-bubble city Vancouver, where the lower end of the market (condos) is still seeing significant price increases, while the luxury market has just now begun to deflate, with prices down 7.6% over the past six month.

London’s famed oligarch-driven luxury housing boom is wheezing, with prices down 1.1% over the past 12 months, which is a terrible embarrassment. Knight Frank is looking for the silver lining: “In London, while the market remains sensitive to political events there is a sense of (relative) stability being restored.”

At the bottom of the list of 43 top cities is Stockholm, where luxury house prices dropped 8.4% over the past 12 months, with price drops accelerating: over the past six months along, prices have fallen 9%.

The table below shows the top 43 cities, ranked by changes in luxury home prices. The bottom 11 cities have experienced price declines over the past 12 months. The list also shows price changes over the past six and three months.

Rank by % price change  City 12-month % change 6-month % change 3-month % change
1 Seoul 24.7% 19.9% 11.6%
2 Cape Town 19.3% 8.6% 1.4%
3 Guangzhou 16.1% 2.4% 2.2%
4 Berlin 10.9% 5.8% 1.2%
5 Shanghai 10.9% 5.1% 3.9%
6 Paris 10.5% 1.1% 0.0%
7 Madrid 10.1% 4.0% 3.0%
8 San Francisco 9.0% 5.2% 1.0%
9 Sydney 8.7% 3.0% 0.9%
10 Melbourne 8.3% 2.0% 0.1%
11 Los Angeles 8.1% 2.7% 1.9%
12 Edinburgh 7.7% 4.7% 3.3%
13 Hong Kong 6.9% 2.7% 1.0%
14 Beijing 6.4% 3.7% 1.7%
15 Zurich 6.0% 3.1% 0.4%
16 Singapore 5.8% 5.9% 2.1%
17 Frankfurt 4.2% 1.5% -0.4%
18 Toronto 4.2% 6.0% 4.2%
19 Brisbane 3.6% 3.0% 0.1%
20 Tokyo 3.4% 1.9% -0.7%
21 Perth 2.8% 1.4% 0.1%
22 Miami 2.8% 0.7% 1.1%
23 Dublin 2.6% 1.0% 0.6%
24 Bangkok 2.3% -0.4% -2.0%
25 Geneva 1.8% 0.7% -1.0%
26 Jakarta 1.2% 0.4% 0.0%
27 New York 1.0% -0.8% 0.4%
28 Mumbai 0.6% -0.1% 0.0%
29 Vienna 0.4% 0.4% 0.2%
30 Milan 0.4% 0.0% 0.0%
31 Vancouver 0.2% -7.6% -1.8%
32 Rome 0.0% 0.0% 0.0%
33 Nairobi -0.9% -1.8% -1.8%
34 Kuala Lumpur -1.0% -0.8% -0.6%
35 London -1.1% -0.6% -0.5%
36 Moscow -1.4% 2.8% 2.2%
37 Istanbul -1.8% -5.5% -5.6%
38 Bengaluru -2.3% -1.7% -0.1%
39 Tel Aviv -2.4% -4.8% -5.9%
40 Delhi -4.0% 0.8% 0.0%
41 St. Petersburg -4.0% 0.3% 0.2%
42 Taipei -7.4% -4.8% -4.5%
43 Stockholm -8.4% -9.0% -3.9%

Knight Frank obtained the data from its global network except for Tokyo (Ken Corporation); New York (StreetEasy); Los Angeles, Miami, and San Francisco (S&P CoreLogic Case-Shiller); Tel Aviv (Israel Central Bureau of Statistics); Berlin and Frankfurt (Immobilienscout); Stockholm (Svensk Maklarstatistik); Toronto (Real Estate Board of Toronto); Vancouver (Vancouver Real Estate Board); Zurich and Geneva (Wüest Partner). Price changes are calculated in local currency.

And here’s an update on rents in the US. Chicago’s are collapsing, New York’s are swooning, and Southern California’s are booming. Read… Update on the Most Splendid Rental Bubbles & Crashes in the US 
 

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