LONDON IS WORLD

LEADER FOR

LUXURY PROPERTY

London has

overtaken New York

City and every other

major city in the

world on prices and

sales in the prime

property market in

the last five years,

according to a recent

report by Knight

Frank.

In London, there were 2,147

luxury home sales in the $2m-

$5m price range in 2009, which

put the capital behind Hong

Kong but roughly on par with

NYC. However, by 2014, sales

in this category in London had

soared to 6,250 – double the

number witnessed in Manhattan

and tripe the amount in Hong

Kong, Singapore and Sydney.

In the ultra-prime market – the

homes selling for more than

$5m (around £3m) – London

has also surpassed Manhattan.

Knight Frank found that 1,638

properties were sold in London

for over $5m in 2014, compared

to 796 in Manhattan, 258 in

Sydney and just 21 in Los

Angeles.

The upmarket

estate agent

reports that

London and NYC

are constantly

fighting for

position as the

world’s leader in

the prime property

market, but

London has taken

the top spot.

“These two cities

continue to lead

development trends in

terms of design,

pricing and iconic

architecture.”1 –Liam Bailey, Head of

Research at Knight Frank

He expects London’s dominance to

remain for the next ten years, although

NYC could take over in 2024.

Prime London house prices

have increased faster than

any major city in the past

decade, including those in

East Asia. The average

Mayfair or Holland Park

apartment price rose by a

huge 138% since 2004. Hong

Kong followed with 93% price

growth, New York at 78% and

Singapore at 69%.

The increase in London prices

arrives despite a fairly high supply of

new build luxury apartments

compared with overseas cities.

In Hong Kong and NYC,

residential completions

were lower than in

London in 2014, as the

English capital

experiences a boom in

tower building.

London’s traditional, low-rise skyline is being

replaced by soaring residential skyscrapers, with

264 buildings of more than 20 storeys either

proposed, approved or under construction in

Greater London.

However, NYC is

fighting back. It’s

new 1,396 foot tower,

432 Park Avenue, is

nearing completion,

making it the tallest

residential building in

the world and the

third highest in the

city. The building’s

penthouse was

allegedly sold to a

Saudi Arabian buyer

for $95m in 2013.

In total, there are 100 new residential

skyscrapers in Manhattan, with 6,500

condos for sale. Knight Frank reports

that this represents a “staggering

inventory”1 of $30 billion worth of

property.Similarly to the situation

being observed in

London, New Yorkers

are complaining that

foreign buyers are

purchasing luxury

apartments that are

then left empty, pushing

up prices and making

housing unaffordable for

ordinary locals, as rent

prices are also inflated.

Knight Frank believes that one

reason London has surpassed

NYC is not just its attractiveness to

overseas buyers, but a rising

population and workforce,

particularly in the finance and IT

industries.

The number of Londoners working

in finance, insurance, IT and

telecoms increased from 1.28m to

1.56m between 2009-14,

surpassing the 1.1m employed in

the same sectors in NYC and

0.8m in Hong Kong.

However, Knight Frank says

the global city to watch is

Miami.

Despite

becoming the

repossession

capital of the

USA during the

financial crisis,

the city’s housing

market has

started to boom

again recently.

Prices for prime

property have

surged by 91% in

the last five

years.

1 http://www.theguardian.com/money/2015/oct/06/london-outstrips-new-york-

to-top-global-prime-property-league