Prices of luxury homes in Paris rising fastest
PARIS luxury-home prices rose by more than a fifth in just 12 months -- the most in the world -- as buyers from emerging markets competed for a limited number of properties, auctioneer Knight Frank said.
Values of houses and apartments costing more than €2m increased 22pc in the French capital. Hong Kong was second with a 15pc rise, and Helsinki third with 12pc. Shanghai and Beijing completed the top five. Moscow and Los Angeles were the only cities in the 15-strong survey to post declines. Dublin was not included.
Buyers from Brazil, Russia, India and China "are increasingly looking to Paris as a safe haven to invest funds in a mature and high-performing market", Liam Bailey, head of residential research, said. "Like London, supply is hindered by a paucity of new-build developments."
Measures by Asian governments to curb property speculation appear to be working, with luxury-home prices in Hong Kong, Shanghai, Beijing and Singapore growing 11pc as a group in the first quarter, compared with 55pc a year earlier, Mr Bailey said.
London prices gained 8.6pc, putting the city in a tie for sixth with Singapore. Zurich followed with an 8pc increase.
The index compares the performance of prime housing markets, defined as the top 5pc to 10pc of the mainstream market, in key global cities.
"Our view is that the next property cycle -- which has already started -- will see the consolidation of an elite tier of global city markets, where the top addresses will become increasingly fought over by wealthy buyers as stores of value and long-term secure investments," Mr Bailey added.
"Values will rise from here. It won't be a steady upward path, and there are some considerable risks out there -- from sovereign debt in the west to asset bubbles and hot money in the east. But in the last two years the highest price achieved in the global market has breached the £557 (€625) per square metre barrier," he said.