Real estate: luxury housing prices fell for the first time since 2009

In the first quarter of 2023, the price index in 46 major cities fell by 0.4% compared to the corresponding quarter of 2022, according to real estate consultancy Knight Frank, quoted by Bloomberg, in the first quarter of 2023, noting that the company sets the most elite – 5% of the market in value terms.

Head of Research at the above company explained the slowdown in price growth mainly by a jump in lending rates by most central banks. New Zealand saw the biggest drop, with luxury home prices in Wellington, Auckland and Christchurch dropping dramatically, with Wellington dropping 27% for example. Cities such as San Francisco and Vancouver also saw fairly significant declines of 10% and 9% respectively. Prices in Hong Kong, New York and Los Angeles remained virtually the same, except for the fact that they fell by only 1%.

While the overall index was on a downward trend, most of the 46 cities in which luxury home prices were studied saw moderate to significant increases in the first quarter of the year.

London saw a slight increase of 0.5%, while Zurich and Miami recorded a jump of 9% and 11%, respectively. Dubai saw an impressive 44% increase in property prices. It should be noted that from March 2020, i.e. with the onset of the pandemicprices in Miami jumped 149%.

This growth is certainly impressive, but it did not prevent the overall index from turning negativereflecting a deviation from the 10% jump in world prices for luxury housing observed in the last quarter of 2021.

However, while the downturn in the luxury real estate sector may continue in the coming quarters, it is unlikely to be as significant as during the 2008 financial crisis, when prices fell just over 8% from their zenith. in nadir, says the head of Knight Frank.

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