A glimpse into the global property market

Political turmoil, economic uncertainty and biting cost-of-living pressures continue to subdue the property sector in some of the world’s most sought-after cities. Following a record-breaking post-pandemic boom, a sense of caution has taken hold in key markets across the globe. However, there is hope on the horizon, with many experts anticipating a return to stability and renewed investment in several major cities over the coming year.

London

After a tumultuous 2022 the London housing market is predicted to continue to cool as the UK continues to grapple with recession and higher mortgage rates. The cost-of-living crisis, soaring inflation and interest rate spikes led to monthly house price declines earlier this year. Pundits are predicting further rate rises this year, which suggests the slowdown could deepen further in the coming months. However, leading property agency Savills has predicted longer-term, central London prices will grow 13.5 per cent over the next five years, underpinned by a lack of supply and fewer new builds.

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Dubai

After weathering some tough pandemic years, Dubai’s property market is showing strong signs of recovery supported by higher oil prices, social reform and government policy aimed at making investment more attractive. Last month, UK-based The Economist ranked the city third place behind Miami and Singapore in an index based on population, economic growth, vacancy and house prices between 2019 and 2022. Looking ahead, ambitious plans to double the economy by 2033 signal a promising future for the city’s sometimes-volatile property market.

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Shanghai

China’s financial hub was hit hard during the pandemic, with the city’s 26 million residents forced to endure a brutal zero-COVID regime that caused a sharp contraction in the housing market. National Bureau of Statistics data showed property investment fell a further 5.7 per cent in January and February this year. However, the government is determined to reverse this trend, announcing goals to grow investment by 5 per cent by December. This has buoyed confidence, with analysts predicting the market could bounce back by the end of the year.

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Paris

Despite its enduring appeal, the City of Lights has not been immune to the fundamental global economic forces of rising interest rates and inflation. Parisian property sales fell 15 per cent between December 2022 and February this year, compared to the same period the year before. And since the end of last year, prices in every sector of the French real estate market have declined – a phenomenon not seen since 2014 – with predictions of further reductions throughout the year.

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New York

The New York housing market continues to struggle with a severe lack of inventory and rising interest rates. The number of sales plummeted 34.3 per cent in February, compared to the previous year. But there was a silver lining for the city that never sleeps.

New York held onto the top ranking in global real estate consultancy Frank Knight’s 2023 Wealth Report, recording the highest number of $25 million-plus property transactions globally. While further turbulence is anticipated in the short term as the Federal Reserve takes measures to curb inflation, experts are predicting a gradual normalisation of the market in the medium to long term.

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In the dynamic global property market, signs of stabilisation and renewed investment are emerging. Despite economic uncertainties and high inflation, the market’s strong position suggests a relatively short adjustment period and excellent potential investment opportunities in repriced markets.

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