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Shock and Awe at Performance of Prime City Real Estate

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Knight Frank  prime real estate  CIVETS  MINTs  Prime Global Cities Index 

Shock and Awe at Performance of Prime City Real Estate

By - Wednesday 16 May 2012

Since the global financial crisis crippled the world it has been hard to be shocked by anything the property indices have thrown at us, but many people have been surprised by the latest release of the Knight Frank prime global cities index for Q1 2012.

Since 2009 and especially last year the world's prime cities have been a bastion of good fortunes and climbing house prices. But the latest release showed a 0.4% decline in prices across prime cities, the first negative performance since the crisis struck says Knight Frank. But while the first negative performance since the crisis hits hard to laymen, the index has shown growth of below 2% per quarter since Q1 2010 and averaged just 0.6% last year according to Knight Frank.

What is shocking though, and it is a pleasant surprise for many is the top 5 markets. Nairobi comes in first with growth of over 24% in the last year. The Indonesian capital Jakarta came in second with 14% price growth in the 12 months to end Q1, which will of course please those who have shown the faith to invest in the new CIVETS and MINT groupings (Columbia, Indonesia, Vietnam, Ecuador, Turkey and South Africa + Mexico, Indonesia, Nigeria and Turkey).

From there the index goes on to show a clear sign of just how strong the American recovery is becoming in parts, with Miami coming in third at 13.9% growth. London then takes fourth with 11.3% before we return to North America with Manhattan's 9.2% growth giving it fifth place. Apart from that only Moscow, Zurich, Beijing Cape Town and Dubai managed growth over the year, with Los Angeles and Dubai at less than 0.5%.

Words of caution on America though. Of the top 5 markets, all have growth in the past 6 months and quarter on quarter as well, with the exception of 2 – you guessed it Miami and Manhattan. Miami prices grew 3.1% in the 6 months ending Q1, but fell 1.9% on the quarter, while Manhattan was flat over 6 months but fell 4.3% on the quarter.

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