Melbourne and Sydney have placed among the top ten of 43 “Prime Global Cities” for the first quarter of 2018, according to a benchmark index by international real estate firm Knight Frank.
Rankings were based on the price growth of luxury property – the top fifth of the housing market in each city. Sydney placed ninth, with an 8.7% hike from a year before. Melbourne finished right below in tenth place, with an 8.3% comparable rate.
Seoul placed first (25%) in large part from red-hot price growth in its Gangnam district – known as the “Beverly Hills” of the South Korean capital. This comes despite policymakers’ efforts to control price growth there.
“Across a large part of the city new macro prudential measures, including new taxes for owners of multiple properties and tighter lending restrictions, are cooling growth, but the prime area of Gangnam is still seeing strong speculative activity,” the report said.
Meanwhile, the South African capital of Cape Town ranked second (19.3%) and the Chinese city of Guangzhou – northwest of Hong Kong – placed second (16.1%). On the other hand, Stockholm ranked last with an 8.3% drop.
Despite ranking in the top 10, Sydney and Melbourne face a demand-supply imbalance with supply constraints supporting prime prices, the report said. Brisbane (3.6%) and Perth (2.8%) were newcomers on the list, ranking 19th and 21st respectively.
Asia-Pacific cities accounted for half of the top ten rankings. Despite the global economy being in “robust health” Knight Frank warned of significant risks ahead in the form of rising debt, inflation, and greater housing market regulation.
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