Staggering price appreciation for Chinese cities, albeit a declining trend. European cities of Madrid, Berlin and Paris record healthy growth.
Amid a global pattern of weakening prices for luxury residences, a declining trend engulfed Indian metros. While Delhi (0.8 percent) and Bengaluru (0.3 percent) recorded negative growth, prices for luxury homes in Mumbai saw a marginal increase of 0.8 percent between June 2016 and June 2017.
On the ranking table Mumbai stood at 24 followed by Bengaluru (29) and Delhi (31), says a report titled Knight Frank Prime Global Cities Index Q2 2017.
The index that tracks the movement in luxury residential prices across 41 cities worldwide rose by 4.4 percent in the year to June 2017. But at least 17 of these cities saw a decline in annual growth as compared to the previous quarter.
Chinese cities continued their domination in the market with Guangzhou topping the list with a staggering surge of 35.6 per cent in luxury prices.
But all three Chinese cities saw a decline in annual growth compared to the previous quarter amid the lending restrictions on home purchases.
Beijing, witnessed the steepest drop from 22.9 per cent year-on-year in March 2017 to 15 per cent annual growth in the quarter ending June.
The momentum resonated in Europe as well courtesy a combination of factors such as safe haven capital flows, Brexit and recent addition of top grade stock in these markets. Cities such as Madrid (10.7 percent), Berlin (9.7 percent), Paris (8.8 percent), and even Dublin (3.8 percent) recorded a marked increase in their annual growth rate.
“The prime residential market in India’s top three cities of Mumbai, Bengaluru and Delhi are under tremendous pressure. The Indian metros rank quite low in order among 41 global cities," says Samantak Das, Chief Economist and National Director – Research.
"Mumbai on a year-on-year price index growth could manage just a positive number, but Bengaluru and Delhi have declined on a year-on-year basis. It is interesting to note that Bengaluru, the most resilient market has also suffered a decline.""The pressure will continue for some more time because we believe that the catalysts for growth pertaining to prime residential market are yet to come back,” he adds.