(8 July 2016 – Hong Kong) – Knight Frank today launches the Prime Global Rental Index for Q1 2016. The index, which tracks the change in luxury residential rents across 17 cities globally, fell for a third consecutive quarter with rents falling on average by 0.5% in the year to March 2016. Of the 17 cities tracked by the index, 11 have recorded flat or falling prime rents over the last 12 months.
Results for Q1 2016:
- Toronto leads the rankings with prime rents increasing by 8.9% in the year to March 2016.
- Guangzhou ranks 2nd with 5.3% increase, Shanghai is at the 4th place with 1.4% rise while Beijing has decreased 0.9% and ranks10th.
- North America continues as the strongest-performing region with prices rising by 3.3% on average.
- Out of 17 cities, London has slipped to 11th with prime rental prices slipping 1.0% year-on-year, the lowest annual rate since May 2014.
- Nairobi occupies the bottom ranking with reduced corporate demand and increased supply causing rents to slip 7.9%. This is preceded by Hong Kong with a decrease of 5.2%.
Nicholas Holt, Head of Research for Asia Pacific, says, “Real estate markets in Asia have been sensitive to the wider macro-economic environment in 2016, as demonstrated by the prime residential rental performance in the seven major Asian cities tracked.
“Singapore, with significant export exposure, has seen rents soften, while mainland Chinese cities have seen more varied performance, with Shanghai still seeing rental growth on the back of a robust local economy.
“Looking forward, the political uncertainty in Europe and the US will likely weigh on the region for the second
half of the year, depressing rental growth prospects.”
“Softening expatriate demand, along with growing global economic uncertainties, has put downward pressure on Hong Kong’s luxury residential rentals, which edged down 5% during the first five months of 2016. They are expected to drop up to 8% over the year”, said David Ji, Director and Head of Research & Consultancy, Greater China.