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Savills Prime Index: World Cities

Savills has just released its Prime Index: World Cities report, which found that during 2019, the average capital values remained flat, averaging an increase of just 0.1%. This was down from 2.6% for 2018 and continued the slowdown in growth seen since 2016. The slowdown accelerated throughout the year and prices fell in many cities in the second half of the year resulting in an average decrease of -0.4% over the six months to December 2019.

Rental values performed better than capital values during 2019 with an average annual increase of 1.2%, an increase from the 0.4% average growth over 2018. But, like capital values, rental growth also slowed in the second half of the year, with a 0.3% increase compared with 0.8% for the first half.

London’s prime residential market has been impacted by Brexit uncertainty and stamp duty reform with prices down 1.5% for the year.

Cape Town was the biggest faller in the index over the past year, with a 6.3% decline. After several years of outperformance relative to the national housing market, Cape Town’s prime market is undergoing a period of price corrections following weakened economic sentiment and a slowdown in demand. Dubai saw the next largest yearly decline, with a 5.8% fall, as existing oversupply with continued high levels of completions impacted values.

Rental value growth by city
Los Angeles and Miami saw the largest increases in rents over 2019, with a 6.1% and 4.8% increase respectively. Moscow saw the third highest growth in rental values over the year, with a 3.8% increase.

Dubai and Kuala Lumpur saw the largest rental falls over the year, with -5.0% and -4.1% respectively. Both markets are facing oversupply and potential renters have a lot of choice and negotiating power.

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