[ecis2016.org] Prices of luxury homes in India’s metro cities continued to decline in Q3 2017, reflecting a global trend, with Mumbai being the only exception, according to the Knight Frank Prime Global Cities Index
The declining trend that engulfed luxury home prices across key Indian metros earlier this year, has further intensified amid a global pattern of weakening prices, revealed the Knight Frank Prime Global Cities Index Q3 2017. The index that tracks the movement in luxury residential prices across 41 international cities, every quarter, rose by 4.2 per cent in the year to September 2017. However, at least 19 of these cities saw a decline in annual growth.
While Delhi (-3.1 per cent) and Bengaluru (-0.8 per cent) recorded sharper negative growth, prices for luxury homes in Mumbai saw a marginal increase of 0.6 per cent between September 2016 and September 2017, albeit on a declining trend. Reflecting on the dismal performances, all the three metros featured on the price index slid from their positions in the previous quarter. Delhi saw the biggest drop in rankings, as it slipped from the 31st to the 36th position.
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“Prime residential markets have been under immense pressure, particularly since demonetisation. While the move had an adverse impact on the overall residential market, luxury homes’ sales were worst hit. The quintessential wealthy investors, known to take interest in such projects are missing, courtesy, better returns from other investment avenues. Among the top three cities in India, the growth in price in this genre has been slowly tapering. While Mumbai maintained positive growth, albeit at an abysmally low rate, Delhi and Bengaluru witnessed negative growth. We foresee the trend to continue for at least 8-12 months in this end-user driven market,” said Samantak Das, chief economist and national director – research, Knight Frank India.
International luxury home price trends
Guangzhou continued to top the index, with a staggering 36.3 per cent price surge in luxury homes but the overall narrative for China was of a slower growth. While the annual prime price growth in Shanghai slipped from 19.7 per cent last quarter to 14.9 per cent, the rate of price growth decline in Beijing nearly halved from 15 per cent to 7.2 per cent, owing to government-enforced cooling measures.
However, the Asia-Pacific region dominated the top 10 rankings, with Seoul (11.2 per cent), Sydney (11.0 per cent) and Melbourne (10.4 per cent) joining Guangzhou and Shanghai.
Among luxury residential properties in Europe, Madrid, Paris and Berlin recorded robust growth. However, other key markets such as Zurich, Vienna, Geneva and London, ended the 12-month period witnessing a sharp price decline.
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