The global luxury real estate market shows the fastest growth since 2016

The global luxury real estate market is showing the fastest growth since 2016.

The resilience of global residential property markets has not abated in the first half of 2021. According to the Savills World Cities Prime Residential Index, over the past six months, the cost of luxury real estate in the world has grown by an average of 3.9%, which is the highest since December 2016.

Sustained record low interest rates, rising consumer confidence, an increase in deals with high budgets and economic stimulus measures have driven property prices skyrocketing.

This jump in prices follows a more subdued period: from June 2018 to December 2020, real estate prices increased by an average of only 0.7%, due to the unstable situation in the world, changes in taxation, and in some cities, the political situation. The low price growth was exacerbated with the pandemic in 2020, which has affected the closure of many real estate markets.

Not all cities experienced similar dynamics over the past six months, but more than 70% of them showed a positive increase in property values during the specified period.

Some of the world’s cities that depend on international buyers and participate in the study showed negative growth in property values, because this particular segment was hit hard by restrictions on movement.

Growth in the cost of luxury real estate in 30 cities around the world

Here are the predictions of the authors of the study:

The return of international travel is likely to increase the number of luxury property buyers in many cities. With the lockdowns lifted, demand for real estate will also increase, as buyers are also attracted by cross-cultural job offers.

The push for more space in prime residential real estate is likely to continue. While more people are returning to office work, many are still working remotely, especially in Europe and North America. And this will keep the desire to acquire more spacious lots.

The low interest rate environment is likely to continue and support strong sales growth in most cities. Buyers are attracted to this offer both in terms of capital preservation and its multiplication, as real estate is rising in value in many cities.

A global economic recovery will boost consumer confidence and boost demand for luxury real estate in many cities. While some pandemic-related uncertainty remains, the luxury real estate sector is likely to remain strong for the foreseeable future.

It should be noted that according to Knight Frank’s study of the capitals and main cities of the world, Ljubljana ranks 68th with a 7.8% growth in Q2 2021 – Q2 2020