Mumbai : 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, showed 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% in the year to September 2017. However, at least 19 of these cities saw a decline in annual growth.
While Delhi with 3.1% decline and Bengaluru with 0.8% drop recorded sharper negative growth, prices for luxury homes in Mumbai saw a marginal increase of 0.6% 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.
“Prime residential markets have been under immense pressure particularly since the event of 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 interests in such projects are missing courtesy better returns from other investment avenues,” said Samantak Das, Chief Economist and National Director – Research, Knight Frank India.
According to him, among the top three Indian cities 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,” Das added.
Among global cities, Guangzhou continued to top the index with a staggering 36.3% 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% last quarter to 14.9%, the rate of price growth decline in Beijing nearly halved from 15% to 7.2%, courtesy government enforced cooling measures.
However, the Asia Pacific dominated the ten rankings, with Seoul’s 11.2%, Sydney’s 11%) and Melbourne’s 10.4% rise.
Among luxury residential properties in Europe, Madrid, Paris and Berlin recorded robust growth. But other key markets such as Zurich, Vienna, Geneva and London ended the 12-month period witnessing a sharp price decline, the report said.