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[click to open report]

Our friends across the pond at Knight Frank just released their Q3 2012 Prime Global Cities Index which our firm and Douglas Elliman in NYC and Miami contribute content to.

Miami was #3 after Dubai although that placement was exagerated by the drop in distressed sales in south Florida (and they will rise going forward). Still, Miami has come a long way in 2 years. Manhattan showed decline but most of that was attributable to the shift in mix to entry level sales as mortgage rates continue to fall to new record lows. However it’s quite interesting to look at Manhattan as more mundane a market than the super-luxury segment would suggest. Further proof that the top end is not a proxy for everything else.

Cities such as Dubai, Miami, Nairobi and London are increasingly considered investment hubs for HNWIs in their wider regions. In the wake of the Arab Spring, Dubai has been seen as a relative safe haven for MENA buyers while Venezuelan and Brazilian investors have looked to Miami to limit their exposure to domestic political and economic volatility.

HNWI = High Net Worth Individual

Here’s KF’s top line overview:

-Fifteen of the 26 cities tracked by the Prime Global Cities Index (58%) recorded flat or positive price growth in the year to September, but over the last quarter 20 of the 26 cities (77%) have seen flat or positive growth – indicating an improving scenario.
-The index now stands 18.7% above its financial crisis low in Q2 2009 with Hong Kong, London and Beijing having been the strongest performers over this period, recording price growth of 52.9%, 45.4% and 39.5% respectively.
-Five cities recorded double-digit price growth in the year to September; Jakarta, Dubai, Miami, Nairobi and London – a city from each of the five key world regions.

Q3 2012 Prime Global Cities Index [Knight Frank]
The Elliman Report: 3Q 2012 Manhattan Sales [Prudential Douglas Elliman]
The Elliman Report: 3Q 2012 Miami Sales [Douglas Elliman]

Tags: Prime Global Cities Index, London, Brazil

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Here’s a great research piece from Knight Frank on the state of housing in many of the world’s cities.

South America is dominating other regions in market performance right now. Canada shows strength (all the HGTV shows seem to be filmed there) and why isn’t Greece falling harder?

Knight Frank published their The Global House Price Index recorded its weakest annual performance since the depths of the recession in 2009, recording only 0.9% growth in the year to March 2012. Doubts over the Eurozone’s future, along with the Asian governments’ staunch efforts to cool their markets and deter speculative investment, have taken their toll.

Here’s in the index table:

• Q1 2012 Global House Price Index [Knight Frank]

Tags: Global House Price Index, Europe, Canada, Greece, Canadian Housing Market

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[click to play clip]

I did a short interview on Bloomberg yesterday regarding their coverage of Knight Frank’s 2010 Wealth Report

The Bloomberg coverage was in reference to my contribution to the report via interview where they matched me up against their analyst Xavier Wong, Head of Research for Greater China and Hong Kong.

The prime New York market, where prices fell 12.5% in 2009, is gaining strength , but the recovery is tentative, says Leading New York property commentator Jonathan Miller

The frozen market in Manhattan in the first half of 2009 gave way to a much stronger second half of the year. By the summer, the market began to see a recovery in sales activity following an improvement in economic confidence prompted by a revival in the stock market.

While the market has undoubtedly improved compared with last year, we ought not to get too excited. The recovery of late 2009 was a short-term uptick, due in large part to a release in pent-up demand. My view is that the surge in demand is not the start of a rising housing market. While sales are up sharply, prices have moved “sideways.”

I have some lingering concerns for the New York market in 2010. The market has been aided by government stimulus measures – tax credits for first time buyers, in particular. This package will expire in mid-2010. While the US economy is growing, the high rate of unemployment – around 10% and somewhat higher locally – as well as a tight mortgage lending environment do not provide a firm basis for ongoing growth in house prices.

A real fear for 2010 is rising mortgage rates, currently at near record lows. The potential for growing foreclosures, which were not a problem in 2009, is another real factor.

One segment of the market that has seen a noticeable uptick has been international demand, where the weak dollar has prompted interest from Asia, Europe and South America. Demand from South Korea has also become more noticeable.

Looking outside New York, both Boston and Washington DC have also improved, with rising resale volumes in both markets. On Long Island, the Hamptons luxury second home market has surprised everyone with its resilience to date. As a discretionary market, there was general concern that this region would see large declines in prices and sales from the 2008 and early-2009 market turmoil. In fact, both sales and price trends have remained in line with the Manhattan market.

Watch the clip which summarizes the report [Bloomberg]
Open 2010 Wealth Report [Knight Frank]

Tags: Europe, Television, China

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[click to open report]

The Wealth Report 2010 was released today by Knight Frank Research. It is a much anticipated annual survey targeted at the high end consumer with great detail on global residential property trends. The report covers 56 high end housing markets across the globe.

Check out The Housing Helix podcast for my interview with Andrew Shirley, Editor and Liam Bailey, Head of Residential Research for the Knight Frank Wealth Report 2010.

I had provided commentary on the NYC housing market for the report.

….While the market has undoubtedly improved compared with last year, we ought not to get too excited. The recovery of late 2009 was a short-term uptick, due in large part to a release in pent-up demand. My view is that the surge in demand is not the start of a rising housing market. While sales are up sharply, prices have moved “sideways.”…

Some interesting data points:

• Overall annual global decline was 5.5%
• Monaco saw prices as high as $5,900 p/SF US.
• 73% of cities saw year over year declines versus 40% last year.
• Middle East down 27.5% – the largest decline – Dubai showed a 45% drop.
• Asia Pacific up 17.1% – the highest increase – Shanghai showed a 52% gain.

In light of this strong growth, the Hong Kong government has threatened measures to restrict the market – notably through mortgage lending restraint, reducing, for example, the mortgage limit for luxury property from 70% to 60%. Despite these potential restrictions the market continues to grow.

This example points to an interesting development. The crippling impact of property bubbles bursting in Europe and the US has created a much more confidently interventionist approach in China, Hong Kong and Singapore (where cooling measures were introduced in September last year) among other markets.

Listen to the interview with Knight Frank [The Housing Helix Podcast]
Download The 2010 Wealth Report [Knight Frank]

[click to play clip]

Update: Just came across the Bloomberg video and my interview giving a quick take on the US luxury portion.

Tags: Europe, China

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Tags: London

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Matrix goes in Seine (ok, sorry)

About my light postings over the past week – my kids are on school break, I had been working on the release of yesterday’s Long Island Queens Market Overview as well as prepping for expert witness testimony given yesterday and an exciting development for Miller Samuel to be announced soon. I’ll be back on track next week.

KHS Real Estate has traded emails with me periodically and are avid readers of Matrix. They provide real estate market information and commentary through their web site and blog.

Paris, France real estate market
4th Quarter 2006

Commentary provided by Charles Meunier of KHS:

In the city of Paris, the average squaremeter price for old and unoccupied apartments stood at € 5,772/ USD 7,842.99 during the 4th quarter 2006. Once again, the 6th arrondissement around “Saint Germain- des- Prés” has been the most expensive (€ 8,586/ USD 11,667.09 per squaremeter), followed by the 7th ( “Musée d’Orsay”- “Invalides” – “Eiffel tower”/ € 8,307/ USD 11,289 per m²) and the southern Marais ( 4th arrondissement, € 7,951/ USD 10,806.20). The districts in the north- east remain the most affordable: the 19th ( “la Villette”) cost € 4,571/ USD 6,212.45 and the 20th € 4,774/ USD 6,488.34 per squaremeter. These are the official numbers released by the Paris Notary Chamber on a new conference on 3 April 2007.

In 2006, the annual price increase was 9.9 % for the whole of the City. However, the market lost steam and weakened toward the end of the year. According to the Notary Chamber, the prices in the 6th arrondissement “Saint Germain- des- Prés” rose by 13.7% and in the 8th arrondissement “Champs-Elysée” by 6,5% ( increase per annum/ 4th quarter 2006).

During the year 2006, exactly 36,824 old and unoccupied apartments were sold in Paris, compared to 38,229 in 2005.

Nonetheless, I want to emphasise that apartments in fairly good quality are sold within a margin of around € 7,000 / USD 9,514.75 to € 11.000/ USD 14,951.75 per square meter in the attractive central districts “Saint Germain- des- Prés” or in the Marais. Premium real estate on prestigious addresses reach price levels between € 15,000/ USD 20,386.50 and € 20,000 / USD 27.182 per squaremeter and more.

4th Quarter Stats
KHS Paris Real Estate website
KHS Paris Real Estate blog

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