In 2023, a year of global economic volatility, residential property has defied expectations and remained resilient, with positive capital value growth seen across many global cities’ markets, according to Savills’ Prime Residential World Cities Index.
In times of uncertainty, real estate is often viewed as a safe haven of capital preservation and growth, says Dr Andrew Golding, chief executive of the Pam Golding Property group, which is Savills’ exclusive residential real estate partner on the African continent.
Says Dr Golding: “As noted in the Savills Index, the year ahead is a year of elections, adding a layer of uncertainty to the outlook. Globally, there are elections taking place in almost 70 countries, accounting for over 40% of the global population and comprising over 60% of the world’s economic output.
According to the new research from Savills, capital values for global cities will remain in positive territory in 2024. Prime residential price growth of 0.6% is forecast across the 30 global cities monitored by Savills in the Index, down from the 2.2% achieved in 2023.
Of the 30 major global cities Savills monitors, 17 will record slower capital value growth than in 2023 while 13 cities are forecast to achieve equal or even slightly enhanced growth in 2024, as formerly high-growth markets slow to more sustainable levels from their post-pandemic heights.
Sydney and Dubai are forecast to be the two top performers for the year ahead, with both cities set to benefit from an increase in their high-net-worth population. Cape Town, Barcelona, Madrid, and Kuala Lumpur each boast prices per square foot below $800, and comprise the next four forecast highest growth markets.
“In the face of ongoing economic uncertainty and a higher interest rate environment, prime residential markets in world cities were muted in 2023 following two years of significant gains. Growth is forecast to slow further in 2024 as markets return to more normal conditions, but will broadly remain in positive territory,” said Kelcie Sellers, associate, Savills World Research.
“However, we expect it to be a year to watch the markets globally. Countries which account for approximately 40% of the global population will go to the polls this year, and housing will likely be front of mind for many voters and policymakers alike. The potential for central banks to also cut interest rates during mid to late 2024 may also boost activity across prime property markets and could surprise on the upside for pricing in the latter part of the year.”
The Savills Index says Sydney is seeing high levels of demand for quality prime homes, but supply remains low. This imbalance will likely persist through 2024 and push up prices, which are forecast to increase by 8%-9.9%. Dubai increased by a significant 17.4% over the year, but this rate of growth will likely slow this year as it returns to more normal activity. Savills anticipates prices to grow there by a further 4%-5.9%.
Adds Dr Golding: “Cape Town continues to be viewed favourably by both local and international buyers who draw confidence from the competency of the local government and well-maintained infrastructure. There is a shortage of stock as demand continues to be brisk driven both by local and international buyers. The Cape Town market offers the best value when compared to other international markets and recent sales to international and SA buyers underscore the value proposition across all price bands. This includes luxury homes achieving prices in excess of R90 million in Bishopscourt. Cape Town has also had a bumper season with many international clients having viewed our properties for sale and looking at securing a home in the Cape.”
Savills World Cities Prime Residential Index: 2023 prime capital value growth forecast vs capital growth value in 2023
| City | 2024 Forecast | Capital value growth in 2023 | Prime capital value Dec 2023 (US$ psf) |
| Sydney | +8% to 9.9% | 6.8% | $ 1,830 |
| Dubai | +4% to 5.9% | 17.4% | $ 750 |
| Cape Town | +2% to 3.9% | 3.1% | $ 250 |
| Tokyo | +2% to 3.9% | 8.2% | $ 1,950 |
| Rome | +2% to 3.9% | 3.3% | $ 1,410 |
| Kuala Lumpur | +2% to 3.9% | -1.0% | $ 250 |
| Athens | +2% to 3.9% | 6.1% | $ 1,130 |
| Madrid | +2% to 3.9% | 4.0% | $ 750 |
| Barcelona | +2% to 3.9% | 3.4% | $ 680 |
| Amsterdam | +2% to 3.9% | -2.4% | $ 960 |
| Geneva | >0% to 1.9% | 1.8% | $ 2,550 |
| Milan | >0% to 1.9% | 2.5% | $ 1,520 |
| Lisbon | >0% to 1.9% | 1.6% | $ 1,330 |
| Bangkok | >0% to 1.9% | 9.1% | $ 1,050 |
| Mumbai | >0% to 1.9% | 10.3% | $ 1,140 |
| Miami | >0% to 1.9% | 4.9% | $ 1,510 |
| Beijing | 0.0% | 2.1% | $ 1,520 |
| Shanghai | 0.0% | 4.3% | $ 2,060 |
| Los Angeles | -1.9% to <0% | -2.2% | $ 1,550 |
| Berlin | -1.9% to <0% | -3.5% | $ 1,150 |
| Seoul | -1.9% to <0% | 0.8% | $ 1,730 |
| Guangzhou | -1.9% to <0% | 2.1% | $ 1,510 |
| Hangzhou | -1.9% to <0% | 0.9% | $ 1,230 |
| London | -1.9% to <0% | -0.9% | $ 1,920 |
| Paris | -1.9% to <0% | -2.7% | $ 1,550 |
| Shenzhen | -1.9% to <0% | -4.9% | $ 1,530 |
| New York | -1.9% to <0% | -3.7% | $ 2,560 |
| San Francisco | -3.9% to -2% | -6.1% | $ 1,400 |
| Singapore | -3.9% to -2% | 1.3% | $ 1,800 |
| Hong Kong | -10% or lower | -2.0% | $ 3,970 |
Source: Savills Research
(Psf: per square foot)
For further information visit www.pamgolding.co.za
