_Paris leads our prime global residential forecast for 2018

The next decade will see a new phase of lower growth as stimulus subsides, interest rates start to shift upwards and investors prioritise lower risk environments and income generation ahead of capital growth.

The 2018 Forecast

Each year we ask our global research teams for their outlook for the year ahead, to help us assess the current landscape for prime residential purchasers, be they investors or owner-occupiers.

Covering 13 cities from Vancouver to Sydney and from Los Angeles to Hong Kong, we highlight the key responses below.

Paris, a market that has struggled to see strong price growth in recent years, is benefiting from the improved economic outlook for the Eurozone. The French capital is also back on the radar of global investors, in particular, those from the US, the Middle East, and Europe, and we expect to see healthy price growth next year, perhaps up to 9%.

Dubai is expected to see modest growth in 2018, after weaker performance during the recent market cycle. Government investment in the economy and infrastructure ahead of Expo2020 are helping to attract more employment, driving demand higher. 

According to our researchers’ forecasts, Singapore (5%) and Geneva (3%) could prove 2018’s most improved markets. Singapore’s luxury residential market, in the doldrums for several years, is expected to shift up a gear in 2018 as market sentiment improves. Geneva, off-limits for non-resident buyers, offers safety, privacy and unrivalled schools putting it high on the list of wealthy families looking to relocate. 

Hong Kong, with ongoing demand from mainland China is likely to post the strongest growth of major Asian urban markets during 2018 with a 7% rise by the year-end. 

In central London, we expect prime prices to rise marginally by 0.5% in 2018, with cumulative price growth over the next five years reaching 13.1%. While London’s fortunes will continue to be buffeted by taxation and the outlook for the pound, Brexit – and its impact on employment will be the overriding issue to watch. 

While uncertainty on this pivotal issue means we are not expecting prices to rise significantly in 2018, we do believe that recent price falls will help transactions to continue to pick up from the lows they hit in 2016.  Read more in our UK prime forecast blog.

In North America, Los Angeles is likely to see a continuation of growth (3% next year) reflective of a supply and demand imbalance. The prime market in both New York and Miami are still seeing the impact of higher inventory volume and are likely to replicate London’s largely flat price performance in 2018. 

Vancouver is the only city where we expect prime residential prices to soften in 2018 but even here the decline is marginal at 2.5%. The introduction of a foreign buyer tax in 2016 along with tighter capital controls in China have influenced demand.

Return to the blog next week for more in our series of blogs on our Prime Residential City Forecasts.  

Important Notice © Knight Frank LLP 2017 – This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of Knight Frank LLP to the form and content within which it appears. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names).