Real Estate
Luxury Rents Rose In Q1 But Some Wealth Centres Saw Reversals - Knight Frank
Some wealth management hotspots suffered a pullback in luxury rental prices in the first three months of this year.
The price of renting a luxury apartment in the world’s major
urban centres on average rose by 0.6 per cent in the first three
months of this year when compared to a year before, new figures
show. A number of wealth management hubs, such as Geneva and
Singapore, saw rents actually fall.
Global real estate firm Knight Frank said its
barometer of rental prices for luxury properties revealed a
generally lukewarm market, with a number of locations posting
falls, although Tokyo was a standout performer, with rents up
11.1 per cent on an annualised basis. Dubai rents rose 8.1 per
cent, Zurich rose by 6.9 per cent, Cape Town rose 6.5 per cent
and Tel Aviv rose by 5.0 per cent, the firm said.
On the other end of the scale, Moscow, perhaps reflecting
Russia’s economic woes in the face of falling energy prices and
external sanctions connected to the east Ukraine crisis, posted a
fall of 16 per cent, while Beijing fell 6.3 per cent, and
Singapore was down by 3.7 per cent. Geneva luxury rents fell by
2.8 per cent.
The slide in Moscow’s rents is directly linked to the fact that
prime rents in the city are measured in dollars, so the slump in
the rouble exchange rate has a sharply negative effect, Kate
Everett-Allen, partner, residential research at Knight Frank,
said in the report. On the other hand, the strength of Tokyo
rents is part of Japan’s emergence from recession at the end of
last year and a speeding up of the country’s economy. Areas of
Tokyo such as Chiyoda and Minato have seen a rise in tenant
demand.
Hong Kong rental prices have been hit by the prospect of a US
rate rise and continued cooling measures by the city’s
authorities. (The peg between the Hong Kong dollar and the US
dollar means a rise in US interest rates will directly affect
borrowing costs in the Asian jurisdiction.)
Among other details, Toronto luxury rentals were flat in Q1,
while New York rents rose by just 0.3 per cent in Q1 from a
year earlier.
