World Residential Markets 2015 2016

Savills World Research
World Residential Markets

Performance and Prospects | 2015 – 2016
2015
Foreword
Where next for global property investment? Executive summary
We assess the performance and prospects
of residential markets across the world
R
esidential real estate determine the directions of markets Global residential property markets
markets are, by but, overlaying these macro-level are driven by population growth,
definition, local, issues are a series of cultural, policy
rooted to the earth in and even psychological factors like
economic growth and wealth
a particular time and the reputation of some jurisdictions See pages 06/07
place. Most are not traded globally as ‘Safe havens’ which can make
like gold, commodities, equities and an enormous difference to how they
bonds although there are global perform, especially in the short term.
forces at work on them and shaping
their future. Location by location
Success in buying homes or Our location by location commentary Prime city and ‘retreat’ markets
residential property investments on pages 20-49 covers the local
abroad therefore depends on news and considerations relevant to are shaped by globally
understanding which forces are local residential investment markets in 27 mobile individuals
and which more universal. different places around the globe.
This new publication contains They reveal some very different
See pages 10/11
information on a wide range of approaches in different jurisdictions
popularly invested residential real to residential property issues,
estate markets around the world. They ranging from golden visas to cooling
range from small, top-end resorts measures, for example.
through well-known regions to major This approach of national trends
world cities. While they are unusual in overlain by local and policy issues Successful future investment will
attracting significant amounts of cross- has enabled us to form a robust view be in secondary property,
border money, they are all subject to on where the different markets may
underlying demand and supply factors be headed in future. As most of the
second-tier cities and resorts
which govern the way that markets markets we cover are prime city or See pages 12/15
move worldwide. prime and ‘second home’ resort,
The challenge for this publication we have also taken a view on how
was to identify these basic factors they may differ from the nation’s
which all markets have in common. mainstream housing market. These
This publication The exercise meant that we have been prognoses, a mixture of empirical
This document was published in September 2015. The data used in the charts and tables is able to put to one side the issues with analysis and qualitative evaluation, Prime markets in world cities are priced
the latest available at the time of going to press. Sources are included for all the charts. We have which local commentators may be are outlined on pages 12-15. n
used a standard set of notes and abbreviations throughout the document. currently fixated and instead focus on
at a high plateau. Other locations may
the basic, longer-term market drivers offer better value for money
Savills plc which are relevant to all markets. Yolande Barnes See pages 16/17
Savills is a leading global real estate service provider listed on the London Stock Exchange. The three metrics that we identified World Research
The company established in 1855, has a rich heritage with unrivalled growth. as having the greatest fundamental 020 7409 8899
It is a company that leads rather than follows, and now has over 600 offices and associates influence on housing markets generally ybarnes@savills.com
throughout the Americas, Europe, Asia Pacific, Africa and the Middle East. are detailed on pages 6-7. They @Yolande_Barnes
This report is for general informative purposes only. It may not be published, reproduced or quoted Favourable market conditions and
in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other “Success in residential property investment growth potential can be found in
document without prior consent. Whilst every effort has been made to ensure its accuracy, Savills
accepts no liability whatsoever for any direct or consequential loss arising from its use. The content abroad depends on understanding which the USA and parts of Europe
is strictly copyright and reproduction of the whole or part of it in any form is prohibited without forces are local and which more universal” See page 18/19
written permission from Savills Research.
savills.co.uk/research 03
World Residential Markets 2015
Contents
MARKET OVERVIEW Prime Market Dynamics Investment Strategy Value Comparisons Forecasts
06
Which markets have seen the end to
10
Who’s buying where around the world.
12
International investors will do well to
16
How do the prime price points
18
Savills World Residential Investability
the boom and bust cycle and which look outside of the prime markets in compare in residential markets Ranking.
ones never busted? major cities that have been top of their across the globe?
shopping lists for the past six years.
We suggest some alternatives.
EUROPE NORTH AMERICA AND THE CARIBBEAN AFRICA & THE MIDDLE EAST asia pacific OUTLOOK
20
United Kingdom, France, Spain,
32
USA, Caribbean.
40
South Africa, United Arab Emirates.
44
Hong Kong, Singapore, China,
50
Investors are seeking opportunities in
Portugal, Italy, Switzerland. Australia. more peripheral locations and higher
yielding secondary property as an
alternative to first-tier cities.
04 savills.com/research 05
Market Overview
why housing markets Housing market
differ across the globe

experiences
around the world
There are four ways that
global real estate markets
have behaved since 1985. We
have divided national housing
A
markets into four main groups:
Which markets have seen the end cross the world and point out that the way these variables
through the ages, the play out on the ground and at  Boom-busters
to the boom and bust cycle and single fundamental different times is extremely complex  Stabilisers
which ones never busted? driver of residential and results in a wide variety of  Deflators
property demand market behaviours.  High-risers
has always been the number of The combined effect of economic
households in a population wanting performance and recessionary Different demographic,
a roof over their head. The price of cycles, inflation and fiscal regimes, economic, and supply side
Words: Yolande Barnes those roofs is then a function of the demographic changes, the availability factors have played out in
Twitter: @Yolande_Barnes number of properties and the amount and cost of finance as well as land different countries – with
of money available with which supply politics, policies and planning, extremely varied results.
households can compete for them. not to mention cultural, legal and  Scandinavia: home of the high risers
Translated into global investment tenure norms means that housing

FIGURE 2
property, this means the following markets behave in very different ways
three factors will make for house price across the globe. The Boom-busters real house prices
1. THE Boom-busters
growth in excess of general inflation: Understanding and navigating n Denmark n France n Ireland n Italy n Netherlands n Spain
n Growing population this complexity is a formidable 200
n Growing affluence task for any investor in their home These markets are the ones that
n Limited land and/or housing supply environment, let alone on the global often get most attention. All of
The absence of one of these variables stage. This document is designed to them have seen property values
can stall a housing market and the provide the key information needed fall since 2007, some of them very 150
absence of two or more can send to understand a wide variety of world substantially. For two countries
Index (Q4 1999 = 100)

property values downward. residential markets and then to home (the Netherlands and Ireland) real
Having boiled the global housing in on a few of the most internationally- property values fell back to the level
market down to just these three invested markets in cities and resorts they last saw at the Millennium. 100
variables: demographic, economic for a deeper look and prognosis on They have started to recover but
and supply-side, it is important to how they might behave in future. real, inflation-adjusted, values are
still well below their former peak.
50
France, having recovered in real
FIGURE 1
terms almost to peak levels after
Real (inflation-adjusted) house price experiences around the world 1985 – 2015 2008, has since double-dipped and
n Pre 2000 n Post 2000 is still below peak, though not as 0
New Zealand substantially as Spain, Italy and
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Global Housing Market Australia the Netherlands.
Performance Canada
Three of the Boom-busters (Italy, Source: OECD
Figure 1 shows just how Sweden
France and Spain) saw similar real
differently housing markets Norway
price rises and falls in the previous
have behaved over the last 30 FIGURE 3
France
market cycle of the late 1980s
years. It shows average house
Great Britain
and early 1990s. It is interesting Characteristics of the Boom-busters
price movements in different to note, however, that Denmark,
Belgium
countries, adjusted for just one the Netherlands and Ireland were Geography: Eurozone
Switzerland
of many external variables that previously much less volatile than
Finland
impact them, namely, inflation. they were in the last economic cycle. Monetary/lending/fiscal policy pre recession: Loose
Denmark
It shows that there were an
Spain GDP growth: Below average Decelerating
enormous range of experiences
Italy
in different housing markets Median household income (average): Lower side of average £30,198
93%
USA
before the Global Financial
Netherlands Monetary/lending/fiscal policy post recession: Tight
crisis of 2008, and there has
Ireland
been an equally enormous Population growth rates: Mixed but tending to accelerate
Germany
variety of experiences since.
Japan
Real house price growth
Housing delivery before peak: High
-40% -20% 0% 20% 40% 60% 80% 100% 120% 140% in Spain, 2000-2007
Source: Savills World Research, OECD Source: Savills World Research
FIGURE 4 FIGURE 6
2. THE Stabilisers The Stabilisers, real house prices 3. THE Deflators The Deflators, real house prices
n Germany n Japan n Switzerland
n Belgium n Finland n Great Britain n USA
250
250
The Stabilisers are a mixed group that Deflators are countries that have seen
cover a range of circumstances and continued and consistent house price
illustrate how different circumstances falls in real terms, and sometimes 200
200
and different policies, ranging from in nominal terms too. The defining
Index (Q4 1999 = 100)

loose credit but strong economic Index (Q4 1999 = 100) characteristic of the most pronounced
recovery to consistently more stable 150
deflators, Germany and Japan are 150
and consistent lending environment significantly below-average or even

have enabled countries to get back, falling rates of population growth
100
or remain on a more even keel. 100 which are continuing to decelerate.
Two countries seem to have been Switzerland’s population growth is
permanently stable, though not high decelerating – and forecast to start
50
rising, since 2000 while some are 50 falling in future years.
seeing a repeat of boom-bust and Against this, (perhaps surprisingly)
recovery seen in the 1980s and 1990s. rates of GDP growth have been 0
The UK and the USA looked like 0 below-average compared to the other
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Boom-busters a few years ago but countries under study here and median
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
have been saved by population growth Source: OECD
household incomes are only average Source: OECD
and economic recovery, particularly in when cost of living adjusted.
major growth-cities. Switzerland clearly looks different
Finland suffered only a small dip FIGURE 5 to Germany and Japan as housing FIGURE 7
but recovered and has flat-lined in real Characteristics of the Stabilisers has grown in value from its very Characteristics of the Deflators
terms since 2010. Belgium did not dip depressed millennial levels – but has
but, since 2008, has also plateaued. Geography: Anglophone & Scandinavian still not regained its 1980s peak. Falling Geography: Germany, Switzerland, Japan
In the USA price falls were long lived. population will continue to depress
Only a pronounced economic recovery Monetary/lending/fiscal policy pre recession: Loose in UK & USA Firm in Finland & Denmark mainstream property values but, in Monetary/lending/fiscal policy pre recession: Firm to very tight
and significant inflation-adjusted uplift Alpine areas, overseas buyer demand
GDP growth: Average to above-average Stable GDP growth: Below Average Decelerating
in residential property values since and constrained supply is likely to
2012 stops it remaining in the Boom- Median household income (average): Average £34,130 boost value growth. Median household income (average): Average £34,078
buster basket. Specific markets within the deflator
The UK’s pre 2007 boom was more Monetary/lending/fiscal policy post recession: Firm to very tight countries are very capable of bucking Monetary/lending/fiscal policy post recession: Loosening
pronounced but subsequent falls were the downward trend. Tech industry
Population growth rates: Mixed but tending to decelerate Population growth rates: Well below average Decelerating
shorter-lived. The market as a whole growth and inward migration to Berlin
has stabilised rather than recovered Housing delivery before peak Low or mixed means values are more likely to rise Housing delivery before peak: High Decelerating
but the average performances of both there while the rise of tourist and
the UK and USA disguise significant leisure resorts in Asia could boost
recovery in key cities. Source: Savills World Research Japan’s ski resorts, for example. Source: Savills World Research
FIGURE 8
FIGURE 9
The High-risers, real house prices 4. THE High-risers high by international standards
n Australia n Canada n New Zealand n Norway n Sweden and economic growth has been high Characteristics of the High-risers
250 and stable or accelerating. Supply
conditions vary from country to Geography: Commonwealth and Scandinavia
For homeowners in many parts of country and location to location
200 Europe and the USA, it is difficult to but key cities are frequently Monetary/lending/fiscal policy pre recession: Firm
imagine there are some countries that experiencing demand at a rate GDP growth: Above average Stable or accelerating
either didn’t see or soon recovered unmatched by supply.
Index (Q4 1999 = 100)
150 from the effects of the debt crisis in The polar differences between Median household income (average): High £45,080
2008 and whose housing markets these high risers and the deflators
have continued to grow and now show how critical the combination Monetary/lending/fiscal policy post recession: Firm
100 stand higher than they did in 2007, of demand and supply drivers and Population growth rates: Above average
sometimes substantially higher. They policy responses can be. The high-
are all either in the Commonwealth risers show the key success factors Housing delivery before peak Average to high
50 (Canada, Australia, New Zealand) that investors need to look out for in
Source: Savills World Research
or Scandinavia (Norway, Sweden). high-performing markets: growing
In all these countries, the three population, growing affluence and
0 main drivers of house price growth
have continued driving. Population
the constraints on urban growth that
many developed countries, and a “Specific markets within the deflator countries
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Source: OECD
growth rates are high and stable or
accelerating, household incomes are
large number of emerging ones, are
now prey to. n
are very capable of bucking the downward trend”
Prime Market Dynamics

Buyer flows shape global
W
hile mainstream or buying additional homes for
residential business or leisure purposes.
markets are London, New York, Hong Kong
residential markets
driven by and Singapore are the most globally “London, New York,
domestic buyers,
prime city and ‘retreat’ residential
invested, while the Chinese are emerging
as the most important source market for Hong Kong and Singapore
markets are shaped by globally global real estate, with capital channelled are the most globally invested”
mobile individuals relocating via Hong Kong and Singapore. n
Who’s buying where around the world
Figure 10
The major international buyer flows shaping prime residential markets
Key World City - highly

globally invested
Key World City - regionally

russia
invested, some global
investment
Key buyer flow canada Moscow
Russian investment UK
weakening
Vancouver
USA
Beijing
Chicago New York Istanbul
San Francisco Seoul
) Los Angeles Middle east china Tokyo
(INDIA )
KONG Shanghai
/HONG Cairo
CHINA
via
( Miami
INDIA
via
Mexico City Abu Dhabi/Dubai Hong Kong
Mumbai
caribbean
Lagos
scandinavia Singapore
& GERMANY
Nairobi
Ireland
UK Berlin Jakarta
London
brazil
belgium, nl
Paris
alps Rio de Janeiro
Australia
Milan
South africa
Tuscany
Riviera & Cape Town Sydney
Monaco
Barcelona
Madrid
Lisbon Balearics
Algarve
Marbella
Investment Strategy
major trends for
opened up between prime and
secondary real estate and how it is
particularly pronounced in markets
international investors
where there is the biggest differences
in purchasing power between cash-
rich prime investors and borrowing-
reliant or renter-occupied secondary
markets. The effect of this is most
marked in the most globalised
residential markets but seems to result
in more expensive property for the
W
wealthy, not for all occupiers.
International investors will do hat strategies The focus on first-tier cities and on Hong Kong is a very good example
do international the prime, central locations of these of this, where typical prime prices
well to look outside of the prime investors need cities has partly been a result of global are ten times the level of secondary
markets in major cities that have to adopt to take urbanisation and the focus by people or Paris where wealthier owners are
advantage of the of the world on city living. In Asia, the paying eight times the price that
been top of their shopping way the world is going? We pick top cities are very often the only places administrative employees would pay
lists for the past six years. We three major trends that we think will where grade A investable new stock for their accommodation in the city.
be important for the next decade can be found. In European, American By contrast, New York, other US
suggest some alternatives. or so. and other ‘old world’ developed cities and Sydney, where all purchasers
n The rise of secondary cities though, the choice of stock are generally more domestic in origin,
n Growth of second-tier cities is less limited but still investment is the multiple of prime property to
n Rise of resorts concentrated in the more prominent mainstream is much lower – meaning
Words: Yolande Barnes and best-known sectors. These have that property is equally expensive for
Twitter: @Yolande_Barnes Prime or secondary? very often been considered as ‘safe both CEOs and administrative workers.
In the world of global real estate havens’ for capital.
investing, the prime residential Looking at the handful of most- Mainstream to prime ratio
markets in first-tier cities around the invested international cities, it is also Figure 12 shows which world cities
globe have taken the brunt of buyer noticeable that cross-border wealth show the greatest differences in
interest for the last decade or so. and other investment has been price between their prime markets
The growing importance of private concentrated in the prime core, rather (occupied by CEOs and directors)
wealth in the sector, particularly after than the equally investable secondary and secondary markets (occupied
2008, has meant that capital has stock of more outlying districts and by admin and other staff). It shows  Cross border wealth and other investment has been concentrated in the prime core of first-tier cities
been concentrated beyond the realm lower grade buildings. Sometimes that those where the difference is
of institutional, commercial property it is a result of investor psychology, greatest are not necessarily the most
owners. This means it has increasingly sticking to the famous or familiar, expensive markets in US $ terms FIGURE 12
been focused on residential but it particularly in new and unfamiliar (although Hong Kong is). It also shows Prime and secondary values
has still landed in many of the same marketplaces. In other cases though, it that some cities have secondary
locations previously favoured by the directly reflects the lending policies of markets that are very expensive Prime values as Secondary values
corporate investor. many financial institutions which help by international comparison (e.g. Mainstream to
Global city a multiple of the as a multiple of the
prime ratio
fund, finance or gear the purchases of Singapore and New York) even cheapest city cheapest city
private individuals. This re-imposes the though their prime markets are not.
FIGURE 11 Hong Kong 10 7.5 5.0
corporate view on the private investor. Broadly, in the more domestically
Prime residential property growth in four world cities The impact of this seems to have invested markets of the USA, Paris 8 2.8 2.4
n London n New York n Hong Kong n Singapore been to push prime prices significantly Japan and Australia, prime property
higher than mainstream property looks relatively cheap compared Dubai 7 2.2 2.0
250
prices in certain cities. Residential to secondary, while in the more
Shanghai 7 2.6 2.4
property price growth in major global internationally invested markets of
200 cities illustrates very well what has Hong Kong, Paris, Dubai, London and London 7 4.4 4.2
happened to prime real estate in the Singapore, secondary property looks
most sought-after urban centres. relatively cheap compared to prime. Singapore 5 3.0 4.2
Index (2005 = 100)
150 Between 2005 and 2014, price growth So, have the prime real estate
Tokyo 4 2.2 3.4
for prime residential properties was markets in global cities lost their lustre?
high, averaging a total of 67% across Are we at a peak and facing New York 4 2.3 4.2
100 all our studied world cities. This growth further price falls in some markets
compares with 50% for ‘mainstream’ or are values at a high plateau Sydney 3 1.5 3.1
properties in the same cities. whence they will stabilise or grow San Francisco 3 1.5 3.3
50
In the most heavily invested cities like slowly for a while? In either case,
Hong Kong, London and Singapore, are there alternatives which will Los Angeles 3 1.1 3.0
the effect has been even more extreme. outperform in coming years?
0 Chicago 2 1.0 2.9
In these key cities, growth has reached While a resumption of substantial
Dec 06
Dec 07
Dec 08
Dec 09
Dec 10
Dec 11
Dec 12
Dec 13
Dec 14
Dec 05
up to 140% in prime markets within the prime real estate price rises in global Miami 2 1.0 3.0
10 year period. cities cannot be ruled out (a continued
Source: Savills World Research This illustrates how a gap has flight of ultra wealth capital to these Source: Savills World Research
 Sanya city,
Hainan Province,
China
‘safe haven’ assets could cause such Even if property is owner-occupied will become more heavily invested We have noticed, for example, The leisure industry in Asia is
an outcome), the probability of this and not let, we consider that and may very well outperform prime in other research projects that nascent at present but its future can
happening is diminishing in the face of yields are a good indication of the markets as capital values respond some small cities have performed perhaps be glimpsed in experimental
several factors. underlying value of these assets. If accordingly and yields move in. particularly well in the creative and PRC projects like Hainan Island, the
First, many of the global ultra- they cannot be let to occupiers at digital economies as they offer growing regional interest in Balinese
wealthy are fully invested in these an economic rent (one that yields a Second-tier city uplift alternative living and working styles and Phuket properties and the rising “The leisure industry in
trophy assets; second, prime
world city assets looked fully
suitable premium over bonds), and
there is no immediate prospect of
For those scanning global property
markets for alternative asset classes,
to this highly productive and newly
wealthy sector.
number of Asian skiers enjoying
Japanese resorts like Niseko.
Asia is nascent and fast
priced against historic levels; third, significant rental growth, then it is we have identified opportunities in We anticipate that residential growing. It will yield new
The rise of resorts
prime yields in many cities are at
an all-time low in many places
more likely that capital values are
being driven by speculative investors
second-tier cities and resort locations
– for different reasons. Leisure resorts and retreats, both as
investment in the best of these
emerging locations, as well as ones, investment opportunities
– and near the level of ‘risk-free’
government bonds.
seeking uplift rather than occupiers
seeking value. The use of speculative
One argument for investment in
second-tier cities is similar to that
an investment class and as locations
for residential investment, also look
not yet conceived, will show strong
capital and income returns. n
in regional resorts”
Finally, there are potentially capital by purchasers tends to make for secondary locations in first-tier interesting. This is partly because
higher-yielding, lower-price markets more volatile so this puts cities, namely higher income returns. post-2008 price corrections make
purchases with higher potential those markets at greater risk of Adding to this lure is the prospect some established resorts look cheap Figure 14
capital growth upside to be made. inflationary bubbles. for some small cities to economically but also because there are new Ageing global population: growth of over 65s
These could be in other types of We see that where higher income outperform as they rise in the global opportunities on the horizon.
n Africa n Asia n Europe n Latin America & the Caribbean n North America n Oceania
property, other locations and returns are available in secondary hierarchy, experience regeneration, There are two timescales of 1,600,000
other cities. markets that these non-core markets reconstruction or renaissance. opportunity here. For established
resorts with recovering prospects, 1,400,000 Forecast
there are buying opportunities now
1,200,000
FIGURE 13 and in this publication we have
Cross-sector comparisons: Gross yields as at December 2014 covered some key examples, like the
Population, thousands
1,000,000
Algarve, Marbella, and Caribbean.
Residential Offices Longer term opportunities arise in 800,000
10 yr govt.
Global city Asia and other fast-developing areas,
bonds
Prime Mainstream Finance Creative including South America. The growth 600,000
London 3.2% 4.2% 3.3% 4.8% 1.9% of wealth in emerging economies,

400,000
particularly Asia, and the ageing of
New York 5.4% 5.9% 4.4% 4.3% 2.3% these populations means that there
200,000
are increasing numbers of people
Hong Kong 1.8% 3.4% 2.5% 3.1% 1.7% who will be experiencing leisure 0
time, holidays and the prospect of a
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
Singapore 3.0% 4.4% 3.4% 3.5% 2.6%
relatively prosperous retirement in
Source: Savills World Research, Eurostat the near future. Source: World Bank
Value Comparisons
The World Residential
space-constrained city. Geneva also Figure 15
starts to rival the top-tier cities on a City market typical prices: prime two bed apartment
floor space basis, for similar reasons.
Price League
Some of the world’s top resorts n USD price n USD psft
rival the world cities on a cost $5,000,000 $4,500
per square foot basis. Prime, four
$4,500,000
bedroom villas in the Swiss Alps and $4,000
in the French Riviera are currently
Typical price - prime 2 bed apartment

$4,000,000
$3,500
more expensive than apartments in
Typical price per square foot

$3,500,000
Paris, Singapore and New York on a $3,000
dollars per square foot basis. $3,000,000
T
$2,500
The Swiss Alps is the most $2,500,000
How do the prime price points he price of prime unit ($2.5m). Other top-tier world cities expensive location in which to buy
$2,000,000
$2,000
residential property Singapore ($2.3m), New York ($2.1m) a ‘retreat’ or leisure property. A four
compare in residential markets varies across world and Shanghai ($2.0m) round off the bed chalet here has a typical price $1,500,000
$1,500
across the globe? markets. In global cities, top six most expensive cities globally, of $4.5m. The Riviera follows at
$1,000,000
$1,000
the typical price of a costing more than $2m per unit. $3.75m for a well located (but not
$500
prime resale (rather than super Dubai heads the second tranche of super-prime) villa property. Property $500,000
prime) apartment ranges from cities costing $1m to $2m per property. here is currently costly on a US dollar $- $-
$450,000 in Cape Town to ten times In this city, prime two bed apartments per square foot basis ($1,650psft)
Hong Kong
London
Paris
Singapore
New York
Shanghai
Dubai
Milan
San Francisco
Sydney
Geneva
Venice
Los Angeles
Miami
Madrid
Lisbon
Cape Town
as much in Hong Kong at $4.5m. stand at $1.9m, but on a square foot and reflects the prevalence of more
The size of that apartment varies basis just $800psft. This reflects compact properties in this highly
significantly so there is a difference the large, newly built properties that desirable location. The prime
of 15 times in the cost per square characterise this market. Good value Algarve comes in third, at just over
foot between small-space Hong can also be found in Milan, Sydney, $3m but is much cheaper by area Source: Savills World Research
Kong and expansive Cape Town. Venice and Los Angeles where large as typical villas are much larger
Hong Kong stands apart as the most space standards push the cost per than in the Alps or Riviera. Other
expensive city location, on both per square foot below $650. By contrast, prime second home markets are
square foot and cost per unit. It is 61%
more expensive per square foot than
its nearest rival, London. Hong Kong
is 45% more expensive per London
San Francisco’s typical prime two bed
price point may only be $1.35m, but
smaller space standards mean it is
much more expensive on a per square
relatively close in pricing points,
ranging from $2.1m in Barbados,
to Tuscany & Umbria ($1.5m) and
St Kitts & Nevis ($1.3m) at the
$4.5m
Average value of a prime
$4.5m
Average value of a prime
 Prime residential property unit ($3.1m) and 55% more per Paris foot basis, topping $1,000psft in this lower end. n 2 bed apartment 4 bed villa/apartment
in Hong Kong is ten times the
price of mainstream property
in Hong Kong in the Swiss Alps
Figure 16
Resort market typical prices: prime four bed villa/chalet
n USD price n USD psft
$5,000,000 $2,000
$4,500,000 $1,800
Typical price - prime 4 bed villa/chalet

$4,000,000 $1,600
Typical price per square foot

$3,500,000 $1,400
$3,000,000 $1,200
$2,500,000 $1,000
$2,000,000 $800
$1,500,000 $600
$1,000,000 $400
$500,000 $200
$0 $0
Swiss Alps
Riviera
Prime Algarve
Barbados
Marbella (inc. Sotogrande)
Cayman Islands
Ibiza
Mallorca
Tuscany & Umbria
St Kitts & Nevis

Forecasts ■ Very favourable to housing prices Modest falls
Savills World Residential

High growth
■ Favourable to housing prices
Falls
Growth
■ Neutral
Investability Ranking
Substantial falls
Some growth
■ Unfavourable to housing prices
■ Very unfavourable to housing prices Little or no growth
F
FIGURE 17 FIGURE 18
igure 17 shows the countries in INVESTABILITY VARIABLE 5-year
which our selected world markets Recent 5-year
Country 5-year Markets prognosis for
operate and how we see various Population growth Wealth Economic Growth Housing price growth
Investability Countries prognosis market*
prime-city and second-home Rank for country*
markets performing within them. GDP Supply Prices relative Los Angeles
Recent Forecast Recent Forecast
per head levels to cycle
We have looked at key demand variables
(population growth, wealth and economic Miami
growth) alongside supply and price levels in order 1 USA
to see which countries are set to perform best. New York
We have then considered the second-home and
San Francisco
prime-city markets, covered in this publication. 2 United Arab Emirates
We looked at each place and how they will Dubai
perform relative to their country and in view of
the cultural sentiment and policy considerations Singapore
at work in those markets at present. 3 Singapore
This enabled us to come up with an overall London
ranking and prognosis for five year growth,
ranging from ‘Substantial’ to ‘Little or no’ growth. 4 United Kingdom Balearics
This prognosis is based on a model of household
Marbella
wealth, economic growth, demand and supply
balance set against a whole range of tax, policy,
5 Spain Madrid
market-cycle and other factors.
In some cases, the prospects for the specific Barbados
investment markets under scrutiny in this
publication, look better than for the country as 6 Caribbean Cayman Islands
a whole due to the international nature of the
market and more diverse range of buyers who St Kitts & Nevis
bring greater purchasing power to bear than 7 Australia
Sydney
domestic buyers in more local markets. Portugal
and Switzerland are good examples of these Algarve
markets where low and slowing population
8 Portugal
growth limits domestic demand but where low Lisbon
supply levels and strong international demand
for Alpine homes (Switzerland) or overseas Milan
demand and discounted prices (Portugal) makes 9 Italy
purchase prices look attractive and improves Tuscany & Umbria
prospects for growth.
Venice
The likely top performers are those which 10 France
have seen strong population growth of an
French Alps
affluent population which is likely to continue.
Future performance of other markets will be
limited by relatively high prices (compared
11 China French Riviera
internationally and/or in relation to historic trends) Paris

and limited or declining population growth. n
12 Hong Kong Shanghai
Hong Kong
13 South Africa Cape Town
Likely top performers are those Geneva
which have seen strong population 14 Switzerland

Swiss Alps
growth of an affluent population Source: Savills World Research *For capital values in second homes & prime markets Source: Savills World Research *for capital values in second homes & prime markets
 Prime London property is

regarded as a safe haven
EUROPE UNITED KINGDOM

The UK is in a phase of sustained economic recovery. With the UK general election now passed, greater political certainty
Unemployment continues to fall (it is among the lowest in the EU) has gone some way to restore the fundamentals of demand in the
and in 2014 GDP grew by its fastest rate since 2007. Low interest prime markets – underpinned by a low interest rate environment
rates, coupled with a national shortage of new homes have fuelled and growing domestic and international wealth generation. Buyers
n Although originating in the USA, the (UK and Switzerland) but increasing price rises, particularly in London and the south east of the country. and sellers who had adopted a 'wait and see approach' are active
North Atlantic debt crisis has been numbers of buyers are being attracted again, secure in the knowledge that a ‘mansion tax’ is off the table,
amplified in Europe by the subsequent by cheap prices and stabilising The prime residential UK market was one of two halves in but the market has not seen a marked bounce-back. Prime London
severe impacts on housing markets. economies into some markets. 2014. The improving economy and positive sentiment from the property has emerged from a prolonged bull run and now looks
mainstream market helped drive demand in the first half of the fully priced and fully taxed. As a consequence the medium term
n This presents a dilemma for n Performance will be highly year. An average price increase of 4.9% was recorded in the prime outlook remains muted.
investors, with euro-denominated dependent on economic performance markets of London and 3.1% outside the capital. But momentum
assets appearing cheap by in future, not just entry price. was lost over the summer and prices remained flat in the final six The mainstream markets meanwhile have been impacted by
international standards but currency Careful attention therefore needs months of 2014, with small falls in prime London. Much of this was regulation on mortgage lending, but low interest rates coupled with
and economic risk weighs against to be paid to economic forecasts down to changes to the stamp duty regime and uncertainty ahead a fundamental lack of supply across much of the country means
this lure. and the prospects of population of the UK general election. that prices have maintained an upward trajectory.
growth and other demand factors in
n It is telling that some of the more specific jurisdictions and cities, even
buoyant international markets in neighbourhoods, if the gems are to be
recent years have been non-euro sifted from the rocks. n
London expansion of tech and in turn demand
from occupiers seeking homes within
the medium term. This will impact
affordability. Investors may take
walking distance of their workplace. heed in London’s mainstream rental
The safe haven credentials of Turning to the mainstream markets, markets, which will continue to benefit
London real estate are well price growth of 14.9% was recorded from a strong occupier demand. n
rehearsed. Politically stable, in 2014. Some 10.6% of this growth
offering security of tenure and an came in the first six months of 2014
advantageous time zone, London alone, according to Land Registry
14.9%
is a cosmopolitan city with global data. The latter part of the year saw a
appeal. Investors have long been cooling of the market, a trend which
attracted to the best residential has continued into 2015. London’s
and commercial assets, with an mainstream markets will have to bear 2014 mainstream
eye to capital growth and/or the the burden of ongoing mortgage
storage of wealth. But London is market regulation, coupled with
London price growth
first and foremost a centre of global the prospect of interest rate rises in
business, and over 85% of prime
buyers live and work in London,
even if many of them originate figure 19
from overseas. UK market performance 2006-2015
London’s prime markets
outperformed those of the rest of n England & Wales - transactions n England & Wales - prices n London - prices
the country in the years following
180 1,400,000
the global financial crisis. But by
Regional economic statistics and trend the second half of 2014 and into 170
1,200,000
2015, prime markets were slowed
160
Country
GDP GROWTH UNEMPLOYMENT INTEREST by changes to stamp duty and pre
RATE 2014 RATE BASE RATE election uncertainty which resulted in 150 1,000,000
Transactions (12 month total)

Price index (Jan 06 = 100)
a lack of urgency among buyers.
UK 2.6%  5.6%  0.5%  Prime central London housing
140
800,000
markets, including areas such as 130

FRANCE 0.4%  10.3%  0.05%  Mayfair, Knightsbridge and Kensington, 120
600,000
were particularly impacted by the
SPAIN 1.4%  22.4%  0.05%  increased stamp duty charges and 110
400,000
the threat of mansion tax, and sellers 100
PORTUGAL 0.9%  13.2%  0.05%  had to factor in price adjustments
90
200,000
accordingly. Values here were down
ITALY -0.4%  12.4%  0.05%  4.3% in the year to June 2015. 80 0
Opportunity lies in emerging prime
Jan-2006
Jan-2007
Jan- 2008
Jan-2009
Jan-2010
Jan-2011
Jan-2012
Jan-2013
Jan-2014
Jan-2015
SWITZERLAND 2.0%  3.3%  -0.75%  markets, particularly those influenced
by London’s tech sector. Clerkenwell
Source: OECD, ONS, Bank of England, INSEE, European Central Bank, Eurostat, Instituto Nacional de Estadística, Istat, SECO
and Spitalfields in east London, for
example, are benefiting from the Source: Land Registry
 The Riviera is a home location for the global super-rich
FRENCH Riviera
FRANCE
The French Riviera, or Côte d’Azur,
The French residential market proved resilient in the years Record-low mortgage rates have improved market liquidity, and it remains among the world’s most
immediately following the global financial crisis. Relatively modest is low interest rates that will keep any further falls modest in 2015. exclusive and desirable destination
price falls of 9.7% were seen between 2008 and 2009. A period Challenges lie ahead in consolidating public finances, improving for second home ownership.
of recovery quickly followed, and by 2011 prices and transaction competitiveness and reducing unemployment. Weak economic Including the towns of St Tropez,
levels had exceeded their 2007 highs. growth is forecast, which will bear down on the city’s real estate Cannes, Antibes and Nice, the
markets although a change of rhetoric in President Hollande’s stretch of coast was one of the first
This recovery proved short lived, and the last three years has seen policies toward the wealthy has helped the prime markets. modern resorts, tracing its origins as
suppressed transaction volumes and sliding prices, set against a a winter retreat for the British upper
faltering Eurozone economy and rising national unemployment. As Well located, well appointed property is selling best in the capital class at the end of the 18th century.
of March 2015, prices in France were 8.4% down on their Q3 2011 and elsewhere and the market is likely to remain quality-sensitive Today, the Riviera is a popular
high, while transactions stood 15.7% down over the same period. while broader economic issues persist. additional home location for the global
super-rich. The region offers many of
the most desirable characteristics of
an established resort, such as marinas
favoured by such buyers, at cheaper will keep the supply of new build and coastal property, but also has
Paris prices than London. property constrained. many city-living benefits with high-
The price of Paris flats, as recorded Buyers now recognise value in the end retail, restaurants and a full social
Paris is a top-tier world city that by INSEE, have fallen by 6.3% since prime markets and 2015 has seen calendar. This means it is especially
enjoys a steady flow of foreign their peak of Q3 2012. Small, easy renewed market activity, aided by low appealing to the new wave of young,
investment into its property markets. to let apartments in good locations interest rates and for international globally-mobile high-net-worths.
The city has many characteristics have held their value, while larger buyers, a weak euro. Like the rest of France, prices have
that make it favourable for buyers apartments suited to families have One area that Paris outcompetes fallen in the region and the market is
from around the globe: a major seen price corrections of up to 15%. almost every other location is tourism: a buyers’ one. The most desirable
centre of business and finance, Paris would be competing much it is one of the world’s most popular spots, such as Saint-Jean-Cap-Ferrat,
quality cultural institutions, luxury more strongly with London for inward tourist destinations, attracting 32 million a peninsula of land east of Nice, are
retail and celebrated architecture investment in prime real estate were visitors per year, half from overseas. Big characterised by extremely limited
and urban environment. it not for ongoing economic wand spending Chinese visitors are second supply. There are around 500 properties
The prime Paris market is driven Eurozone jitters. Given a weak euro, only to Americans and money spent on the Cap, and only a handful come
by French buyers, while international the suppressed market represents a during their stay is directly on shopping. onto the market in any single year.
purchasers are present at the very top window of opportunity for non-euro This has fuelled huge investment in the Supply is kept low and prices high by
end. Paris continues to see a flow of denominated buyers. Supply is up luxury retail sector, which will remain wealthy buyers who are not generally
buyers from the Middle East seeking a and prime property remains cheap important in coming years. If even a forced to sell.
safe haven in light of continued unrest compared to London with room for small part of this can be translated into Russian buyers have been active
in their home region. The city boasts price growth. Limited development real estate purchase, Paris may find in the region, especially in Cap Ferrat,
the kind of large, lateral apartments opportunities in historic central Paris itself with a large demand base. n where they have accounted for 65% of
buyers in the last four years, followed
by the British, at 14%. Russian activity
figure 20
has slowed as economic sanctions
France market performance 2006-2015 restrict these buyers’ international
- - - Metropolitan France - prices n France - transactions ambition. St Tropez, by contrast, is a
French Alps
n Provence-Alpes-Côte d’Azur – prices n Paris - prices (flats) more domestic market. Even at the to the better known Megève. This
170 900,000 super-prime end of the market here resort benefits from a strong summer
45% of purchasers are French. season, attracting visitors to its
160 800,000
New development opportunities on The French Alps are home to some thermal spa along with mountain
150 700,000 the coast are extremely limited. Some of the world’s most exclusive biking and hiking activities.
developers have taken advantage residential markets. Courchevel Prospective purchasers in the region
1850 attracts UHNWI purchasers

140 600,000 of weaker market conditions to buy may turn their attention to typical ski
properties on large plots and subdivide from around the globe, benefiting conditions. French resorts compare
130 500,000
into smaller, multiple units. from quality skiing across 150km favourably to their Swiss and Austrian
120 400,000 The expansion of tourism, driven of pistes and six Michelin star counterparts, with average season
by improved connections across restaurants. Ultra prime prices here lengths but higher levels of snowfall,
110 300,000 Europe via low-cost airlines, has had exceed €34,000psm. Val d’Isère is resulting in reliable skiing. High
the effect of expanding the second- another a long established ultra- snowfall resorts such as Val-d’Isère
100 200,000
home market into lower price points. prime French resort attracting ‘old enjoy a peak season that runs well into
90 100,000 Smaller, higher yielding units in Nice world’ money. These resorts proved April. Resorts with strong summer
and Cannes, for example, have relatively resilient during the global seasons are less reliant on skiers to
80 0 gained favour with investors given economic crisis. Transaction levels occupy accommodation and pose
Jan-2006
Jan-2007
Jan- 2008
Jan-2009
Jan-2010
Jan-2011
Jan-2012
Jan-2013
Jan-2014
Jan-2015
depressed sales prices but stable slowed somewhat as finance-reliant greater rental potential. Chamonix
rents. In the mainstream markets purchases fled, but prices held firm. attracts a large number of summer
websites such as Air BnB broadcast A rising star in the French Alps is climbers, Mont Blanc tourists, hikers
 Prime market in Paris is driven by French buyers Source: INSEE, CGEDD short-term rental opportunities. n St Gervais, an affordable alternative and glacier skiers. n
thanks to a diverse demand base and performers through the global

Balearics
SPAIN
limited new supply. During the depths economic downturn.
of the recession in 2012, one in every Ibiza has also proved resilient,
Prices across the Balearics have four Spanish properties that were sold having refined its image in recent
Underlying economic conditions remain challenging in Spain. This has been supported by the rapid expansion of air routes to been broadly flat in the last year, to foreigners was in Mallorca. years. The island offers high-end
Unemployment stands at 22.4%, slightly down from a high of and from the Middle East with summer capacity up 36.6% over after rises of 8.1% in the year to Germans have dominated the entertainment, retail and restaurants,
almost 27% in 2013. In spite of this, at the national level the 2014, according to airport operator Aena. Q2 2014. They now stand just market in recent years, accounting attracting a diverse range of
Spanish residential market appears to have stabilised. Prices 11.8% below their 2008 highs, for up to half of all buyers, although European buyers. Buyers of second
stand 28.6% below their 2008 peak and by the first quarter Non-EU nationals have a route into the market via the country’s having seen relatively modest the British have recently regained homes here are among the youngest
of 2015 the rate of falls had slowed to 0.3% on an annual. A golden visa scheme, which attracted 530 foreign nationals price falls by Spanish standards their position as the largest foreign globally, 22% of buyers are aged
rapid rebound is unlikely given the high volume of new housing, between September 2013 and December 2014. A €500,000 during the downturn. buyer group. Seven of the top ten under 40. Unlike Mallorca, British
delivered prior to the crisis, still being worked through (see panel). investment in real estate means the visa holder is automatically The residential markets in the busiest international air routes buyers dominate the Ibiza market,
granted residence and working rights in the country. Investors Balearics have been much more at Palma airport are to Germany. but Spanish buyers are present in
While the domestic market is still suppressed, there are may also invest in public debt or share purchases but, so far, the resilient than those of the mainland Mallorca was one of the better the additional home market too. n
opportunities for homebuyers and investors from abroad. A weak vast majority (92%) have taken the real estate route. The recent
euro makes Spanish property especially affordable to GBP and stability of nominal house prices and transaction levels may be
USD buyers, giving greater purchasing power. Meanwhile, the due at least in part to the golden visa market boost. Investors
Middle East is a rapidly growing source market for residential will do well to consider how vulnerable the market will be to the
investment in the country – particularly at lower price points. cessation of this policy.
figure 21
Housebuilding Peak and current house-building rates

n Recent peak n Now
in Spain 900,000
800,000
Spain experienced extremely 700,000
high levels of new development
Annual delivery
600,000
in the run up to the market
500,000  Residential
peak, much of it aimed at markets in the
Marbella & Sotogrande Madrid

400,000
second home buyers in coastal Balearics have
300,000 been more
resorts. Housing starts peaked resilient than
at 865,500 in 2006 – almost 200,000 mainland Spain
four times that of recent peak 100,000 Marbella enjoys a position as a British, Scandinavian, German and Madrid, the capital of Spain and
delivery the UK, in spite having 0 prime tourist destination, attracting other nationalities. This ‘small town’ important urban centre in its
Spain France Germany UK
a quarter less population. The visitors from Europe and beyond, nature of the population can support own right, is primarily a domestic
withdrawal of buyers during the Source: Ministry of Development, Observation et Statistiques, Federal Statistical Office, DCLG year round. Economic revival in key urbanism and a wide variety of market. Well under 1% of all
financial crisis put a halt to these markets, most notably the UK, has facilities, including golf courses, polo properties transacted in the city
high levels of development, but renewed demand so transactions facilities and a marina. in 2014 were sold to foreigners
figure 22
the stock overhang remains. numbers grew by 28% in 2014 alone. The development received a not already resident in Spain. This
In 2014 just 34,900 units were Spain market performance 2006-2015 Prices in the Malaga region, in boost at the end of 2014 when it was figure is largely unchanged in the
started in the country. which Marbella is located, are 24.4% sold to US investment fund Cerberus last decade.
n Spain - transactions n Spain - prices n Madrid - prices n Balearics - prices n Malaga province – prices
below their 2007 high, but the market Capital Management. This means its residential market
The national picture disguises 140 300000 has realigned and vendors in prime It is anticipated this will result in is much more closely driven by the
some resilient sub markets. The locations are no longer accepting more investment into Sotogrande in national economy and domestic
Index (Q1 2006 = 100), four quarter rolling average
Balearics saw much lower net 130 deep discounts on asking prices. the short-term, and underlines wider factors. Prices here fell further
250000
additions to housing stock, and The British, followed by French confidence in the scheme. Quality, than the Spanish average – some
a dearth of new development 120 and Russian buyers, are the largest modern properties in general are in 33.7% between 2007 and the lowest
in recent years means quality 200000 foreigner purchasing groups. There short supply after a dearth of new level at the end of 2013. However,
110
new units are now in short has also been growing activity among development in recent years. n in common with the rest of Spain,
supply. Just 1,186 dwellings Middle Eastern purchasers, though stability has returned and 2014 saw
100 150000
were completed in the at lower price points than they have prices appreciate 8.1% off their very
Balearics in 2014, for a region 90
historically brought. low base.
with in excess of one million 100000 Carefully managed, well established Prime Madrid offers the best of
inhabitants. It is no coincidence 80 resorts such as Sotogrande, close city living, with good access to shops,
that this region has emerged to Malaga have enjoyed renewed bars and restaurants and cultural
50000
as one of the best performing 70 demand. With a permanent onsite attractions. In spite of being the third
in the country, with prices now resident community of approximately largest city in Western Europe, prime
just 11.8% below their 2008 60 0 7,000 people (which doubles in property is a fraction of the cost of
Q1 2006
Q3 2006
Q1 2007
Q3 2007
Q1 2008
Q3 2008
Q1 2009
Q3 2009
Q1 2010
Q3 2010
Q1 2011
Q3 2011
Q1 2012
Q3 2012
Q1 2013
Q3 2013
Q1 2014
Q3 2014
Q1 2015
high, compared to 28.6% number during the summer) and its counterparts in London or Paris –
below at the national level. an international school for 620 although it is does not attract close
students, half of its residents are to the same levels of international
Source: Ministeiro de Fomento Spanish. The balance is made of  Marbella remains a prime tourist destination investment – yet. n
Real, a prime district within reach Chinese, the major recipients of

Lisbon of key shopping districts. It is the country’s golden visa
PORTUGAL redeveloping buildings here into programme, have mainly bought in
Lisbon is enjoying a new wave high-end apartments. In other real Lisbon, reflecting their preference
Portugal is seeing a tentative economic recovery. GDP growth golden visa scheme (see panel below) has proved successful of investment into its residential estate sectors, investment fund for city property. Other active
stood at just 0.92% in 2014, but it still represents a steady in stimulating prime residential markets, particularly among the markets. While new development Blackstone has been particularly international buyers include South
improvement over previous years’ performance. Unemployment Chinese. For others, the government's Non-Habitual Residents is limited, existing building active in Portugal, obtaining retail Africans, Brazilians and, to a lesser
is falling, and at 13.2% it is significantly lower than that of (NHR) regime offers people moving to Portugal for the first renovations are increasingly and logistics assets. extent, Russians.
neighbouring Spain, at 22.4%. Without the same levels of over- time reduced tax rates or tax exemption for 10 years on certain common. Dilapidated townhouses Buying activity generated from Lisbon’s prime real estate looks
development, its residential markets fared better too. incomes. It has proved particularly attractive to EU residents, are being redeveloped into high end the golden visa scheme has seen good value by European standards
notably those from France. retail, offices and apartments. demand concentrated in central – roughly half the price of that in
Portugal’s residential market saw price falls of 10.3% between US developer Eastbanc has parts of Lisbon, such as Principe Madrid, and less than a tenth of
2010 and 2014, according to data from Instituto Nacional de In addition, Portugal has overhauled its leasing laws. Rents in been active in Lisbon’s Principe Real, Portugal’s historic heart. The London prime prices. n
Estatistica (adding to falls already seen since 2008). Since then, urban areas had previously been heavily controlled by law and
transactions have been on a modest upward trajectory and 2014 had become detached from market reality. While they remain
was characterised by stability in prices, posting a modest 2.2% pro-tenant, they have made residential investment for long-
year on year increase. term income a more appealing proposition. A slowly improving
economy means stronger occupier demand too. All these factors,
The Algarve
Portugal is friendly to foreign investment. There are no restrictions taken together, have contributed to the recent stabilisation of
on property ownership, while transaction costs are low. The Portugal’s housing market. The Algarve is the southernmost
region of mainland Portugal. A
popular tourist destination, it is
a well established second home
location for northern Europeans,
notably the British and Irish. The
Golden Visa Buyers French are a growing force in the
region, attracted by the tax breaks
on offer under the government’s
Portugal launched one of the world’s most successful golden jurisdictions. Cyprus, Greece, Malta and Spain all offer programmes. Non-Habitual Resident regime.
visa schemes in 2012. A minimum investment in real estate of Montenegro and Hungary are to follow. The Caribbean market is In common with other Eurozone
€500,000 grants the non-EU buyer a visa and longer term, a route particularly competitive. Grenada and Dominica offer citizenship by markets, dollar and sterling buyers
to an EU passport. Foreigners need only be resident in Portugal for investment programmes in real estate for as little as $200,000. have the upper hand, and this has
seven days in the first year of residency. helped to revive demand from the UK
There are around 20,000 applicants for golden visas annually across market in particular.
By June 2015, the scheme has brought Portugal €1.46 billion the globe, a market that is growing rapidly. While there are no One of the most established
investment. More than 1,500 visas were issued in 2014 alone. shortage of applicants, the challenge is attracting inward investment enclaves for prime property in the
The Chinese accounted for an overwhelming majority, more than into a country’s real estate market without distorting it. Purchasers region is Quinta do Lago, a high-
80%, and have favoured apartments in Lisbon, at the minimum of real estate via such schemes are required to spend relatively little end golf and residential community,
investment mark. Such was its popularity with the Chinese it has time in the host country, and many use it as a cheaper route into  The Algarve is a well established second home location comprising of more than 1,200
spawned an industry specialising in the sale and investment of major European cities such as London. villas. The resort saw the beginning
Portuguese property to Chinese clients. The scheme was paused in of a sustained recovery in 2014,
figure 24
July 2015 amid allegations of corruption, but reinitiated soon after. Questions have also been raised over setting ‘false floors’ in the with sales increasing by 34%. A
market at the entry price point, whereby properties worth less Portugal market performance 2009-2015 testament to the strength of the
The Portuguese scheme faces competition, particularly as the are artificially priced to the investment minimum. This could have n Portugal - transactions n Portugal - prices market is that offers being made
minimum investment threshold is pushed downwards in other ramifications upon resale, distorting the domestic market. on properties there are now at, or
105 140,000 close to, asking price. ‘Turnkey’
properties remain popular, but
120,000 investors are also active. Older villas
 Lisbon is witnessing investment from China
100 are typically redeveloped for today’s
figure 23
market, complete with the latest
Golden visa buyers: nationalities Oct 2012 – Jan 2015

Price index (Q4 2009 = 100) 100,000
technological innovations.
95 Quinta do Lago represents the kind
80,000
of prime, well managed developments
with strong amenity offer that are
60,000
90 leading the recovery in depressed
n China: 81% national markets. In addition to new
n Brazil: 3% 40,000 French buyers, British, Irish, Belgian
n Russia: 3% 85 and other Europeans are returning to
n South Africa: 2% 20,000 the region in greater numbers.
n Lebanon: 2%
n Other: 9% Outside the prime resorts, the
80 0 Algarve market remains challenging,
but a rapidly improving tourist market
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015
bodes well longer term. Tourist arrivals
were markedly higher in 2014 than the
Source: Ministry of Foreign Affairs Source: Instituto Nacional de Estatistica prior season. n
ITALY
The Italian market is weak, but could be on the cusp of Germans are the dominant international buyer group, accounting
improvement. Unemployment stands at 12.4%, while youth for 45% of non-Italian buyers across the whole country, according
unemployment is much higher at over 40%. While 2015 is likely to Scenari Immobiliari. American buyers are returning having
to see further price falls, a modest improvement in economic largely withdrawn from the market in recent years. Interest has also
performance may put a floor in price falls next year, starting with picked up from British buyers, along with those from Scandinavia,
prime markets and major cities and encouraged by a cheap euro. Switzerland and Benelux countries. Russians, previously active in
A mortgage guarantee scheme launched in January aims to coastal resorts such as Forte del Marmi have largely disappeared
stimulate the lower end of the market. Transaction levels are already given issues in their home market.
recovering in the major cities.
Italy’s prime, second-home markets are some of the world’s most
The Italian market is underpinned by an exceptionally high rate of desirable, characterised by their built heritage and natural beauty.
owner occupation, with 75% of the population living in mortgaged In Lake Como’s rarefied residential market traditional properties with
or outright owned properties, compared to 67% in the UK and 64% lake views are in limited supply and have continued to trade well
in France. By contrast, the rental market is small and low-yielding. when they become available, sustaining prices.
In spite of weak domestic market conditions, a weak euro is History, heritage and the natural environment will sustain Italy’s appeal
attracting US and UK buyers to the second-home hotspots of as an international destination for retreat property over the longer term
Tuscany, Umbria and the Italian Lakes. even if some domestic real estate markets continue to languish.
 Venice is a
much sought
figure 25 after prime
Italy market performance 2006-2015 Milan Venice city and invest in a property to occupy
for part of the year themselves whilst
is estimated to exceed 60,000.
Rentals are underpinned by solid
location
n Italy - prices renting it out at other times, often tourist demand, and yields of 5%
115 Milan, alongside Rome and Venice remains a sought after during the peak summer tourist are achievable.
Venice is one of Italy’s most destination for its exceptional and season, when the city is at its busiest Venice is also a popular second
110
expensive cities. Prime property unique characteristics. and rents are highest. home destination for Italians, who
in Milan is concentrated in the
Price index (2006 = 100)
105 Its real estate is highly prized and The resident population is now make up approximately a quarter of
city centre neighbourhoods of integral to the city’s character. Buyers outnumbered by the number of the market. Other major buyer groups
100 Quadrilatero, Palestro, Castello, in Venice are often familiar with the visitors the city receives daily, which include the French and the British. n
95
and Manzoni, and characterised
by elegant historic buildings.
90 Much of Milan was destroyed
in WWII, so property here, in what
Tuscany & Umbria
85
is left of Milan’s historic centre,
80 is in especially high demand and
especially rare. As Italy’s fashion
Q1 2006
Q3 2006
Q1 2007
Q3 2007
Q1 2008
Q3 2008
Q1 2009
Q3 2009
Q1 2010
Q3 2010
Q1 2011
Q3 2011
Q1 2012
Q3 2012
Q1 2013
Q3 2013
Q1 2014
Q3 2014
Q1 2015
capital, Milan offers extensive luxury Properties in Tuscany have seen Tuscany is governed by strict
retail, but it is also a major financial price falls of between 15% and planning laws which have helped
Source: Eurostat, OECD centre and home to Italy’s stock 30% from their former highs, but maintain its character, but also mean
exchange. most would-be vendors have that modern properties are rare.
According to Nomisma, property ‘held tight’, so few properties have Early foreign investors in the region
prices in Milan fell by -1.6% in 2015. traded. The Chianti represents did well with farmhouse conversions,
This is slightly better performance the classic Tuscan landscape of but such opportunities are now few
than Rome and Venice (-3.4% and rolling hills and cypress trees and and far between.
-2.7% respectively) over the same residential properties come at a Umbria lies directly to the south
period. However, the rental market is premium here. of Tuscany, and was a little later
strong by Italian standards, although This visually stunning region is to receive wide scale foreign
yields are relatively low, between 3% the most internationally invested, investment than its neighbour.
and 4%. n with some high profile sales of Characterised by hill towns, there are
vineyards to Russian buyers in many opportunities for restoration
recent years, although the Russian of historic buildings, and prices are
market is less active at present. lower here. n
Tuscany offers strong potential
for holiday rentals with both
As Italy's fashion capital, rural and city properties in high “Umbria lies directly to the south
Milan offers extensive demand from tourists. Birthplace
of the Renaissance, Florence is the
of Tuscany, and was a little later
luxury retail region’s major city and is one of to receive foreign investment”
 Milan is one of Italy's most expensive cities  Tuscany offers potential for holiday rentals Italy’s most visited.
 The Swiss Alps attract second-home buyers from across the globe
Swiss Alps
SWITZERLAND
The Alps are the world’s largest ski
Switzerland experienced sustained levels of residential price appreciate and make Swiss exports more expensive, slowing market, and attract second-home
growth between 2008 and 2013 (the price of houses grew the economy in general. Foreign buyers with Swiss Franc buyers from across the globe. The
by 28%), running counter to many other European markets. denominated mortgages have been especially hit. Swiss Alpine resorts of Gstaad, St
Economic expansion, low interest rates, growth in real wages Moritz, Zermatt and Verbier are
and immigration of wealthy individuals all supported housing Switzerland has one of the world’s strictest citizenship systems. among the world’s most exclusive,
demand. The strengthening Swiss franc also raised their price in Qualification requires 12 years of permanent, legal and notated and expensive, with ultra-prime
comparison to other currencies. residency, fluency in one of the official languages and integration prices ranging from €20,000 to
into Swiss culture and community. Switzerland introduced new €30,000 per sqm ($1,650 to $2,500
Price growth is now slowing, amid government efforts to cool quotas for EU citizens in 2013. Foreign buyers are also heavily per sqft).
the market by introducing stricter lending requirements. The restricted on residential property purchase – just 1,500 permits are These resorts have diversified
decoupling of the Swiss Franc with the Euro has seen its value released a year – although the rules vary significantly by Canton. beyond skiing to cater to many of
the other demands of the super-rich.
Designer shopping, Michelin starred
restaurants and polo are all part of
the offer.
Geneva These ultra-prime resorts proved
relatively resilient during the global
economic crisis. Transaction levels
Geneva is very much a rental city slowed, but values were supported by
(some 80% of the population is restricted supply and the absence of
estimated to rent) and the rental forced sales.
market is strongly pro-tenant. In the prime markets, holiday
Geneva is an expensive city in which home buying peaked in the 2007-08
to live and there is especially strong season, and fell away significantly
demand for city-centre apartments – during the recessionary years.
which are in short supply. Discretionary second-home
Demand is fuelled in part by buyers, reliant on mortgage finance
employees of the finance and withdrew from the market after the
business services sector on generous credit crunch. Following a period of
relocation packages. stabilisation, prices are now on the
Property prices in Geneva have rise again although buyers continue
grown 55% since 2006, compared to expect a discount, particularly for
to 27% across Switzerland. These second hand properties.
rates of growth are echoed in the Analysis of sales data suggests
rental market. High prices have put more sales are now taking place at
property purchase and even rent out lower price points. The resilience of
of reach of many locals in Geneva, the ultra-prime markets has started
which counts itself alongside to ripple down the market ladder.
Zurich and Zug as one of the most The average purchase price of prime
expensive locations in the country.  Geneva is an expensive city in which to live property transacted across core Alpine
Each day 90,000 workers commute resorts was €1.5m in 2011, when
from neighbouring France to the city, figure 26 only the very best properties were
a number that has doubled over the Switzerland market performance 2006-2015 transacting. By 2014, this had fallen
last decade. to just under €1m, with British buyers,
n Switzerland - prices n Lake Geneva - prices
For those who can afford it (and, in particular, purchasing again at
160
non-nationals who can obtain a permit lower levels.
to purchase), Geneva offers attractive The markets are also seeing an
150
property in a safe, secure environment. expansion in the breadth of buyers
The most desirable property enjoys they attract. Prior to the global
140
lake or mountain views. n recession, British buyers dominated
the market, accounting for the vast homeland. Chinese skiers numbered
130
majority of foreign buyers in many just 10,000 in 1996, and now exceed
Swiss resorts. Today, a much wider five million. Switzerland is now
55%
120 variety of buyers are present. These second only to Japan as a recipient
include a wide range of European of these high-spending ski tourists.
110 buyers, particularly those from northern The Chinese have yet to make Alpine
House price Europe and the Nordics, as well as home purchases in any volume, but
100 those from further afield. other Asian buyers are increasingly
growth in Geneva
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
The premier Swiss ski resorts active in Switzerland, notably those

since 2006 have been among the first to attract from Malaysia, Singapore and
Source: INSEE, CGEDD Chinese skiers outside of their Hong Kong. n
 Prime property prices are

back to 2007 levels in New York
NORTH AMERICA USA
AND THE CARIBBEAN The US economy is in its fifth year of recovery and the housing
market has now seen three years of growth from its lows of 2009.
At a national level, as of April 2015 prices were up 31.2% from
foreign purchasers in dollar terms, at 24%, up from 19% in
2013. Canadians are top by sales number with those from
Mexico, India and the UK rounding off the top five.
their 2009 trough, and stand within 12.9% of their 2006 high.
The prime markets of cities such as San Francisco and New York US cities have been undergoing a renaissance in the last few
have already exceeded their former peaks. decades, a trend accelerated by the rise of new technologies
n The USA’s housing market or, economic growth which, according and creative classes attracted to vibrant urban environments.
more specifically, its sub-prime to most forecasters, is set to The US residential market is among the world’s largest. Some Cities actively provide the human experiences and interactions
mortgage market, was the source continue; this time driven by cash 5.49m properties changed hands in the year to June 2015, (a that allow for the inception, nurturing, funding and development
of the North Atlantic debt crisis. purchasers rather than high gearing. figure down by 24% on 2005 numbers). The market is largely of new ideas and products. New York and San Francisco, both
It is therefore unsurprising that domestic but foreign buyers are present in key locations. with large and growing tech sectors, have seen their markets
America’s housing markets were n The US market is primarily a According to the National Association of Realtors, international moved by this trend. Existing run-down neighbourhoods and
perhaps the hardest-hit among domestic one. The largest US buyers make up 7% of the market in dollar terms (an increase of districts have been colonised by artists and tech entrepreneurs
developed nations and remained cities enjoy foreign investment into 35% over 2013 levels). These are evenly split between resident and reinvigorated. Established neighbourhoods have also
suppressed for longest. their residential markets, but at and non-resident foreigners. The Chinese are the largest group of benefited and values have been pushed to new highs.
lower levels than those seen in
n US housing market recovery has other top-tier cities such as London
been underway for the last three or Singapore.
years or so but is polarised between
the high growth, high-powered first
cities like San Francisco and New
n The Caribbean is the northern
hemisphere’s playground and, as
New York At the very top end of the market,
New York is one of a handful of global
categories: associated costs and
housing tenure. In common
York and other high-supply, slower such, suffered alongside those cities (including London and Hong with the rest of the US, the entry,
recovery and lower demand centres, housing markets. In common with New York rode out the global Kong) in which the global super-rich holding and exit costs associated
for example, the Mid-West. the USA, discounted values in financial crisis better than much most commonly hold residential with property are relatively high.
the Caribbean now make it look of the rest of the US. Prime property. This reflects the city’s status New York’s prevalence of
n The US housing market story is attractive for both second-home residential prices are back at 2007 as one of the most important world co-operative apartments which
currently of high growth reflecting and income investors. n levels, while rents have exceeded cities. Super-prime price records have foreigners find more difficult to
former highs, underpinned by been set at $13,000psft. A raft of new buy pushes investors toward the
solid occupier demand (68% of condominium development catered to relatively restricted 30% of stock
households in New York rent). this group has been delivered in recent that is condominium tenure. n
New York is a major global tech years, delivered in iconic residential
city and a shift in occupier demand is towers that include One57 and 432
shaping its corporate office market, Park Avenue.
and bringing more young renters to There are, however, some possible Buying a property as a
the city. As a result, gross mainstream impediments to investment in
rental yields are relatively high, at 5.9%. New York. These fall into two main non-resident in the US
There are no restrictions on buying and owning real
figure 27
estate in the US, and property may be occupied as a
USA market performance 2006-2015 second home if the purchaser’s passport permits. For
n USA - transactions n USA - prices (20 city composite) n New York - prices n San Francisco - prices longer stays, residency may be achieved via a work
visa, while immigrant investor visas can be obtained
110 8,000,000
with a minimum investment of $500,000 – $1,000,000.
100 7,000,000
In markets like New York, where there is a high
6,000,000 proportion of cooperative buildings, prospective

Price index (Jan 2006 = 100) 90 purchasers require the approval of the building’s board
5,000,000 (in common with domestic buyers). This involves
80 sharing financial statements and tax returns and
4,000,000 a face-to-face interview. Restrictions may also be
70 placed on owners ability to let their property. This often
3,000,000
places a practical barrier in the path of an overseas
60 investment purchaser. Condominium purchase can be
Regional economic statistics and trend 2,000,000
almost as rigorous.
50 1,000,000
GDP GROWTH UNEMPLOYMENT INTEREST
Country
RATE 2014 RATE BASE RATE Property taxes are punitive by global standards,
40 0 comprised of a variety of local and country levies that
USA 2.4%  5.3%  0.25%  can cost around 8% of the assessed value over a
Jan‐2006
Jul‐2006
Jan‐2007
Jul‐2007
Jan‐2008
Jul‐2008
Jan‐2009
Jul‐2009
Jan‐2010
Jul‐2010
Jan‐2011
Jul‐2011
Jan‐2012
Jul‐2012
Jan‐2013
Jul‐2013
Jan‐2014
Jul‐2014
Jan‐2015
five year hold. Sales costs are high with agent fees at
Source: OECD, Federal Reserve, US Department of Labor around 6%.
Source: S&P Case Shiller, National Association of Realtors
32 savills.com/research
savills.com/research XX
33
Miami Los Angeles

at 16,220 units in 2007 and fell to a development has emerged, fuelled by
low of just 1,140 in 2011. When the equity-driven Latin American buyers.
market crashed, prices fell by more As of June 2015, prime prices in Miami
Miami is a cosmopolitan city than half, one of the most severe price stand just 2.9% below their former The Los Angeles prime markets
and gateway to and from Latin corrections in the US. Since this low, high, according to Savills figures. are characterised sprawling
America. A major centre of the market has rebounded strongly. Rental vacancy rates are some suburbs of large detached homes.
finance and international trade, it Of a pipeline of 17,000 of units, 70% of the lowest in the US. Over half Bel Air, Beverly Hills and Holmby
attracts a range of business and have been pre-sold. of Miami’s population is from Latin Hills are the best known and most
leisure buyers. Prime property The fact that Miami is dominated America, a group which represents expensive, in the north of LA, with
is concentrated in Miami Beach by condominiums makes it appealing 70% of all overseas purchasers. many high-profile residents. These
(technically a separate city) an area to international buyers, and it is this Buyers from South America view are quiet, spacious, manicured
famous for its art deco buildings. group that drove recovery in the city. Miami as a home from home and a neighbourhoods, with relatively
Miami was a hotspot of the US In contrast to the pre-2006 boom, stepping stone into the rest of the few amenities. Other prime
housing market boom, the recipient Miami’s recent real estate recovery has United States. neighbourhoods, such as Palos
of a huge amount of condominium been built on equity rather than credit, Top countries of origin are Verdes Estates, Rancho Palos
development. Completions peaked and a new wave of condominium Venezuela (16%), Argentina (13%), Verde and Manhattan Beach are
Brazil (8%), Colombia (8%) and coastal communities with views
Peru (8%). Buyers from Europe, of the Pacific, coastal cliffs and
“The fact Miami is dominated by condominiums notably the United Kingdom, are access to beaches.
also present in the upper tiers of the Urban living is undergoing a revival
makes it appealing to international buyers, and market. Immigration is helping to fuel in Los Angeles, with Downtown
it is this group that drove recovery in the city” population growth which is forecast
to increase 15.2% by 2030. n
LA experiencing gentrification in
recent years, fuelling a surge of
new condominium development.
Luxury condominium buildings are
concentrated in Downtown Los
Angeles, Century City, the Wilshire
Corridor, and at Marina del Rey.
Outside these areas, residential
development is typically restricted
by height, depending on the city and
ordinances, to a maximum of 3-6
stories. LA saw a strong demand
for condominiums in the first part of
2015, with sales up 13.5% on a year-
on-year basis, compared to just 1.1%
increase for single family homes.
As a west coast city, Los Angeles
is strategically positioned to attract
Asian buyers. Major overseas buyer
groups in the LA prime markets
include the Chinese, Koreans,
Japanese, Singaporeans, and
Malaysians. Europeans, including
the British, are present alongside
Australians, a relative minority.
Los Angeles is especially attractive
on the world stage, given its high
global profile due to the entertainment
industry. Prime prices in the city grew
by 5.2% in the year to June 2015
and now stand just 2.2% below their
former high. The city is second only to
New York for the amount of cross-
border investment it receives into its
commercial real estate (11%). n
5.2%
Prime house price growth
in Los Angeles year to
June 2015
 A new wave of condominium development has emerged in Miami  Los Angeles is especially attractive on a world stage
San Francisco
San Francisco is thriving and
fast-growing attracting large
numbers of young professionals,
tech entrepreneurs and other
creative people. It has seen an
27.9 %
increasing number of successful
people migrating out of Silicon
Valley in search of an urban, rather
than suburban, lifestyle.
A small city, just 46 square miles
in size, its compactness and walkability Prime residential property
is central to its appeal, but also means
that new housing delivery is restricted in San Francisco exceeds
by a very limited supply of land.
Strong demand fuelled by a 2007 levels
buoyant local economy, coupled
with this restricted supply has
put upward pressure on prices.
Prime prices grew by 25.7% in the
two years to June 2015, bringing
values to 27.9% above 2007 levels,
outperforming New York, Los
Angeles, Miami and Chicago over
the same period.
San Francisco districts on the rise
include Hayes Valley, the Mission
District and Mid-Market – the
latter having seen an influx of tech
firms setting up business in the
neighbourhood.
Established prime neighbourhoods
include Nob Hill, Pacific Heights
(townhouses and apartments) and
Sea Cliff (single family homes). All
markets are characterised by very
low levels of supply, with inventory at
its lowest level since 2009.
San Francisco’s rental market
is especially strong, with occupier
demand driven by well-paid young
professionals. Rents for mainstream
property in the city have recently
overtaken New York and are now
among the most expensive in the
United States.
With rental growth outpacing
capital value growth,mainstream
gross yields in excess of 7% are
achievable, although investors face
high transaction and holding costs. n
“San Francisco's rental market

is especially strong, with occupier
demand driven by well-paid
young professionals”
 Demand for property in
San Francisco is buoyed by a
buoyant local economy
figure 28
THE CARIBBEAN Tourist arrivals and growth n Tourist arrivals 2014 (LH axis) n Percentage change (RH axis)
The Caribbean is a diverse region and home to 30 territories This has been largely due to the turnaround in the US economy and 6,000,000 50%
that include sovereign states, overseas departments and a more positive outlook from American buyers as a result, coupled
5,000,000 40%
dependencies. The region’s real estate markets are just as with the return of some UK and European buyers. Prices in the
varied, but the prime markets are dominated by second home Caribbean seem now to have bottomed out and transactions are 4,000,000
30%
buyers from overseas. beginning to pick up.
Tourist arrivals 2014
Annual % change
3,000,000
20%
Some of the world’s most exclusive residential markets can be While tourism is important, some island markets benefit from more 2,000,000
found in the Caribbean. Saint Barthélemy, or St Barts has long been diversified economies. In both the Cayman Islands and British Virgin 10%
1,000,000
a playground of the rich and famous, while the Barbados Platinum Islands more than half of GDP is generated by the financial services
0%
Coast has a global reputation among the ultra wealthy. For the sector and they are both ranked in the top 40 financial centres 0
ultimate trophy asset, the Caribbean also offers private islands. globally. This brings with it high paid jobs and residents relocating -10%
Richard Branson’s Necker Island is one of the most famous. for business and employment thus supporting a prime residential
market for long-term residents. -20%
Tourism is all-important to the Caribbean economy and the
Dominican Republic
Cuba
Jamaica
Puerto Rico
Bahamas
Aruba
Venezuela
US Virgin Islands
Barbados
St. Maarten
Martinique
Haiti
Curacao
Trinidad & Tobago
Turks & Caicos Islands
British Virgin Islands
Cayman Islands
Saint Lucia
Belize
Antigua & Barbuda
Suriname
Bermuda
Guyana
Grenada
St. Kitts & Nevis
Dominica
Anguilla
St. Vincent & the Genadines

region is a popular overwintering destination for the northern Some Caribbean islands are more reliant on mass tourism than
hemisphere. As a consequence, the prime residential markets others. Figure 28 shows that none of the islands we look at in
of the Caribbean are closely tied to the success of North more detail here fall into the mass tourism category, even though
American and European economies. Residential values fell by overseas buyers are important in their prime property markets.
up to 30% across the Caribbean during the North Atlantic debt Tourism comprises 36.2% of the economy in Barbados, 26.2% in
crisis, but recent years have seen a return of buyer interest in the the Cayman Islands, and 24.5% in St Kitts and Nevis, according to
Caribbean’s second home markets. the World Travel and Tourism Council. Source: Caribbean Tourist Organisation
Barbados in Barbados (more than 1,500)

are located in specially developed
Cayman Islands Tourism is the island’s other major
economic contributor, which grew
St Kitts & Nevis by the St Kitts & Nevis citizenship by
investment programme. Initiated in
residential communities. These offer by 10.8% in 2014, among the fastest 1984, the scheme was designed to
Barbados is an independent a range of amenities including polo Cayman offers its residents a rate in the region. The industry is St Kitts and Nevis is a twin island accelerate the transformation of the
state and member of the grounds, golf courses, water sports, secure, low-crime environment, supported by flight links to 12 North federation with a combined country from a sugar-based economy
Commonwealth, home to 285,000 marinas, spa centres, restaurants and coupled with good infrastructure American cities, and London, as well population of some 55,000 to a service-based one and stimulate
residents. Tourism is the mainstay boutique shopping. and international schools making as regional destinations. It is also one inhabitants. The islands’ economy economic growth more broadly.
of the Barbados economy, with Buyer preferences are generally it appealing for families. With a of the most popular stopovers for traditionally depended on the For the real-estate route, foreigners
the UK being the largest source for turnkey properties. Interest in population of just 57,000, 96% cruise passengers in the region. growing and processing of sugar must purchase a property of at least
market and accounting for a properties that are more difficult to live in Grand Cayman, the largest The Cayman Island residential cane. This has been replaced by $400,000 in an approved real estate
third of all arrivals (there are manage and maintain, especially the of the three islands, the remainder markets are a mixture of tourism and financial and business development (along with various other
direct flights to ten UK cities renovation or rebuild markets, is now on Cayman Brac and Little condominiums and single family services in recent years. A large government fees). In return recipients
and Concorde previously served substantially smaller than prior 2008. Cayman, 89 miles to the northeast. homes. Seven Mile Beach is new Marriott resort and casino are granted visa-free travel to 130
the island). It also benefits from Property prices fell by up to 20% It is one of the richest countries in characterised by condominiums opened in St Kitts 2003, the first countries including the UK,
a position outside the principle during the global economic downturn, the Caribbean. popular with second home owners facility of its scale on the islands. Schengen area countries,
Atlantic hurricane belt. but the best properties held their Cayman is a British Overseas seeking lock-up-and-leave property. The main airport, Robert L Bradshaw Hong Kong and Singapore.
Both the tourist market and in turn value and the island remains one Territory but enjoys strong links to the Cayman’s strong financial services International, was upgraded to Overseas buyers have traditionally
the market for additional homes is of the most expensive markets in US, the major tourist source market sector means there is a buoyant accommodate wide-bodied aircraft hailed from the UK, US, Canada
Barbados has
one of the most
mature and well established. More the Caribbean. The prime Barbados (accounting for more than three relocation market. Those moving in 2006 and now attracts scheduled and Europe, but the visa investment
expensive golf than half the holiday homes available market is well established and quarters of tourist arrivals) and one to the island may rent initially, flights to London. programme has seen the Chinese,
courses ever built
occupiers tend to hold their of the largest foreign resident groups. but for those staying longer term The global financial crisis came Russians and those from the Middle
properties long term. Most foreign The government plans to leverage single family homes are favoured, late to the islands and the residential East rise in prominence. While many
buyers are British, followed by this link by establishing ‘Health City’, particularly in the north of the markets remained largely unaffected will invest the minimum $400,000, the
Americans, but other European a medical tourism facility aimed at island. While the island’s real estate until 2010. After this, transactions super-prime market is growing, catered
buyers are growing in presence, the North American market. The markets suffered during the global slowed and price falls of 20% were for with the recent addition of a private
along with Canadians. government has also established economic downturn, reaching their reported in the prime sector. The jet terminal at the main airport. n
The island’s Platinum Coast has ‘Cayman Enterprise City’, a special lowest point in 2010, they saw some two islands have different market
international cache and is the haunt economic zone planned to attract new improvement in 2013 and 2014. characteristics, St Kitts the busier
of UHNWIs from around the globe. technology, finance and education Development plot sales are enjoying of the two islands with easy airport
Exclusive, world famous resorts such investment. This is hoped to diversify a resurgence, as are condominium access, Nevis being quieter and more
as Sandy Lane are located here, as is the islands’ economy, which is developments on Seven Mile Beach. expensive. Villa schemes attached to
the Green Monkey, reported to be one dominated by the financial services Watercolours, a 60 unit development hotels are popular among additional
of the most expensive golf courses sector, which currently accounts for with direct beach frontage and hotel home buyers, as are secluded stand- Tourism plays an important
ever built. Royal Westmoreland is 55% of the island’s GDP. Cayman style-amenity, is representative of the alone properties. role in the economy of
another popular high-end development is ranked 39 in the Global Financial continued shift up-market in island The islands’ residential markets
on the island. n Centres index. real estate. n have for many years been supported St Kitts & Nevis
AFRICA & THE MIDDLE EAST SOUTH AFRICA

South Africa enjoys a diversified economy. A constituent of the and 56% to sterling as of July 2015 making the South African
‘BRICS’ association (Brazil, Russia, India, China, South Africa), residential market particularly appealing to these purchasers.
it is characterised by comparatively wealthy cities and poor
n Africa and the Middle East is as diverse as Dubai and Cape Town hinterlands. Cape Town accounts for 6.9% of South Africa’s Foreign investment has been seen across all sectors, notably in
still considered a distinctly make themselves accessible and population, but generates 10.6% of the country’s GDP. farmland where it has led to the introduction of the Land Holdings
high-risk region by most global friendly to the international market. Bill, which limits the length of long-term leaseholds available to
investors so only a few locations At the national level, GDP grew by 1.5% in 2014 and foreigners. Recent government rhetoric around more extensive
stand out as investible. n We expect the bulk of unemployment is high, at 25%. In spite of challenging economic reforms has led to uncertainty in the market. Around 7%
overseas investment into Africa conditions, the property market is robust and house prices of land in South Africa is currently owned by foreign nationals, up
n The potential of this region to remain in large infrastructure remain buoyant. The domestic residential market quickly from less than 5% a decade ago.
for real estate investment is vast projects and agricultural land but recovered from the downturn caused by the global financial crisis
given the size of population and these will gradually open up more and steadily gained momentum from 2011. Low interest rates, a modest improvement in household
rate of urbanisation and economic of the region to other types of disposable income and a marginal strengthening of the overall
development. real estate. Resorts serving the A weak Rand puts dollar and sterling buyers in an especially strong economy suggest average house price inflation will be in high
wealthy of the region are the next position. Since a 2011 peak it has dropped some 52% to the dollar, single digits this year.
n The main barrier will continue to most likely to rise in popularity
be fear of geo-political issues and and prominence for real estate
conflict but key cities and resorts investors. n
Cape Town and the Western Cape November and January, but high
capital values mean that yields,
typically under 5%, are significantly
Cape Town is South Africa’s The Western Cape’s residential real lower than those in Johannesburg.
seat of National Parliament, and estate markets have outperformed Gated developments are
also the legislative capital of the the rest of the country in the last three commonplace in South Africa, albeit
country. The city, dominated by years, but very recent performance less so in the Western Cape as the
Table Mountain, is a global tourist suggests the rate of price growth area is perceived to be safer. Atlantic
hotspot with a distinctly European is slowing. Annual residential price seaboard properties are particularly
feel. Cape Town is located within growth in the Western Cape of 7.3% desirable given beach access and
the wealthy Western Cape. An was posted in the year to June 2015. ocean views. Prime coastal areas
important centre of finance and This compares to national increases of are hemmed in between the ocean
business services, it is a region 5.3% according to the Pam Golding and the mountains, so land supply
characterised by low unemployment Price index. is limited and stock levels in these
(by national standards), fertile land, The Cape benefits from a strong locations are restricted, sustaining
and wine of worldwide renown. holiday rental market between inflating house prices. n
figure 29
South Africa market performance 2006-2015
n South Africa - transactions n South Africa - prices
200 400,000
350,000
180
300,000

160
250,000
140 200,000
Regional economic statistics and trend

150,000
120
GDP GROWTH UNEMPLOYMENT INTEREST
Country 100,000
RATE 2014 RATE BASE RATE
100
SOUTH AFRICA 1.5%  25%  6%  50,000
UNITED ARAB EMIRATES 4.5%  4.2%  1.0% 

80 0
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Source: OECD, IMF, Statistics South Africa, South African Reserve Bank, Central Bank of United Arab Emirates
 Land supply is limited in Cape Town Source: URA
UNITED ARAB EMIRATES

A federation of seven emirates, the UAE is home to the world’s in the UAE, provides a platform for business and financial
third largest oil reserves, but is undergoing transition into a institutions to operate in the region.
diversified economy. Tourism, transportation and financial and Consequently, the UAE stands out as a ‘safe haven’ for
business services, alongside pharmaceuticals and technology, are both local and international investors in the Middle East,
important and growing sectors. Dubai, with comparatively smaller attracting businesses and capital from across the region
oil reserves, has been boldest in this transition and has reduced and into the region.
the portion of its GDP based on oil and gas output to 25%.
Overall, the UAE’s economy has shown volatile growth over
The UAE has also capitalised on its location as the the last three decades, but the highs and lows have become
mid-point between Europe and Asia, developing hub airports less extreme in recent years. Following a sharp contraction of
in Dubai and Abu Dhabi. Dubai International Airport is now the economic growth in 2009, when the economy shrank by 5.2%,
world’s busiest by international passenger traffic. The Dubai economic growth is currently strong, having resumed in the
5
% International Financial Centre, one of many free trade zones region of 5% per annum since 2011.
Annual rate of
economic growth in figure 30
Dubai
the UAE since 2011 Dubai market performance 2006-2015
n Dubai - prices
Dubai was opened up to foreign
property ownership in 2006,
200
although not all sectors of the city
are available for foreign purchase.
Fuelled by cheap credit and
160
speculation, prices in the Emirate
more than doubled by 2008,

but were hit hard by the global
financial crisis when debt dried 120
up. Residential values fell by 60%

between 2008 and 2011. Almost
half of the construction projects 80
in the UAE at the time were put on

hold or cancelled.
After a few years of stagnation, 40
2013 saw recovery, bringing prices
within 39% of their former highs.
Lessons do appear to have been 0
learned from the previous boom and
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Jun-10
Dec-10
Jun-11
Dec-11
Jun-12
Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
Jun-15
bust. The government introduced
cooling measures in the second
half of 2013 in a bid to reduce
speculation in property, including Source: Savills World Research
mortgage caps and a clampdown

on ‘flipping’.
The first half of 2015 brought a range of European and Middle
with it price falls of 7.7% and lower Eastern markets.
transaction volumes, amid a wave of In spite of the slowdown, what
new supply and a fall in speculative makes Dubai’s long term prospects
investment. Rental growth is slowing stronger than many other centres
too, but occupier demand remains in the region is its reputation as
as the economy continues to a global centre of business. This
strengthen. has been underpinned by the city’s
Dubai is the most internationally hosting of the World Expo in 2020.
invested city for residential real Strides are being made in
estate in the Middle East and improving the city’s infrastructure in
much of Dubai’s success is down this car-reliant city. The Dubai tram
to its multi-layered appeal as a opened in 2014, complete with air
business and leisure destination for conditioned tram stations. n  Dubai is an established global centre of business
 Singapore's market cooling measures

have been effective on a global level
ASIA PACIFIC Hong Kong

While the prime sector has slowed,
the value of mainstream property
increased by 13.5% in 2014. This
Hong Kong enjoys a position was the result of low interest rates
alongside London and New York and sustained domestic demand set
as a top-tier world city. With a time against restricted supply in this land-
zone between the US and Europe, constrained city. Cooling measures,
n In a bid to limit house price driven by China’s economy, territories’ further north to form home to the sixth largest stock directed at speculative foreign
growth, Asia Pacific stands out which is currently slowing but commuter zones for already dense market in the world it is a major purchasers, affect prime markets
among global real estate markets likely to receive further stimulus or fully-developed areas of the city. financial centre, third to New York rather than mainstream ones.
as being particularly regulated. and whose population will be a and London in the Global Financial If cooling measures are not
significant and growing market n Asia Pacific presents huge Centres Index. repealed in the near-term and with
n Price cooling measures in the force for decades to come. opportunities as a result of ageing Purchase of Hong Kong property a possible rise in interest rates on
form of stamp duty hikes and population and growing consumer by mainland Chinese nationals has the horizon, it is unlikely that prime
taxation has had the effect of n World cities in the region are affluence for growth in leisure been a major driver of the city’s prices will resume their former
reducing transaction levels in the supply constrained so supply- resorts. We predict that real estate stratospheric price rises as has upward trend. Savills estimates
prime markets, most notably in demand imbalances are likely value growth in the newly emerging strong economic growth. luxury apartment prices in 2015 will
Hong Kong and Singapore. to increase. Sydney faces the resorts will match that seen in the Hong Kong is now the most remain largely stable.
challenges of densification and region’s global cities of late and expensive major world centre in In the longer term, structural
n Prospects for future growth in mass transit, Hong Kong and could be where the ‘smart money’ which to buy a residential property. reforms in China will open up
the region will be significantly Singapore face the need for ‘new heads next. n Prime values are almost double the country further to outflows of
those in London and New York, investment, and directly into other
although the gap is narrowing. world city real estate calling into
Prime residential values have question Hong Kong’s position as
been hit hardest as cooling measures the pre-eminent destination for
continue to have an effect, primarily Chinese capital. n
on transaction levels in the prime
market, while rents are also
depressed due to weaker demand
from the corporate sector. In common
with Singapore, Hong Kong levies an
additional 15% stamp duty on foreign
residential property purchasers.
7.2%
Increase of mainstream
Mortgage insurance is required property in Hong Kong
on mortgages of more than 70%
LTV, while lending is limited to 40% during the first half of 2015
for purchasers with more than one  Prime residential values in Hong Kong are almost double those of London
property. In a bid to dissuade market
speculation ‘Special Stamp Duty’,
levied at between 20% and 10%, figure 31
applies for properties re-sold within Hong Kong market performance 2006-2015
six and 36 months.
Turnover was the main casualty n Hong Kong - transactions n Hong Kong - prices n Hong Kong - prime prices
of these measures, declining 66.7%
from a high in December 2010 to 350 160,000
a low in March 2014. Transaction
numbers since have seen some 300 140,000
recovery, growing 53.7% to May
2015, but still remain 48.8% 120,000
Regional economic statistics and trend

250

below their former high. Prime and
mainstream prices, meanwhile, have 100,000
GDP GROWTH UNEMPLOYMENT INTEREST also gained traction, growing by 200
Country
RATE 2014 RATE BASE RATE
4.9% and 7.2% respectively in the 80,000
HONG KONG 2.5%  3.3%  0.5%  first half of 2015. 150

60,000
SINGAPORE 2.8%  2.0%  1.01%  100
“Hong Kong is now 40,000
CHINA 7.4%  4.1%  4.85%  the most expensive

50
20,000
AUSTRALIA 2.7%  6.0%  2.0%  major world centre - 0
Jan‐2006
Jul‐2006
Jan‐2007
Jul‐2007
Jan‐2008
Jul‐2008
Jan‐2009
Jul‐2009
Jan‐2010
Jul‐2010
Jan‐2011
Jul‐2011
Jan‐2012
Jul‐2012
Jan‐2013
Jul‐2013
Jan‐2014
Jul‐2014
Jan‐2015
Source: OECD, Hong Kong Census and Statistics Department, Hong Kong Monetary Authority, Statistics Singapore, Monetary Authority
of Singapore, Ministry of Human Resources and Social Security, The People’s Bank of China, Australian Bureau of Statistics, Reserve
in which to buy a
Bank of Australia
residential property” Source: Rating and Valuation Department, Savills World Research
SINGAPORE
prevent market speculation and the At the end of Q2 2015, prices are
‘flipping’ of properties, a Seller’s down 6.7% among all private property
Stamp Duty applies, at up to 16% from a high of Q3 2013, while total CHINA
Singapore’s market cooling of the consideration value if sold annual transaction levels are down
measures have been among the within one year, falling to 4% if sold 53.8% over the same period. Residential property investment in China is dominated by Chinese high levels of both local and inward investment from other regions.
most effective on a global level. in year three. By contrast the mainstream market nationals and has been extremely active, because real estate has The city has attracted some of the strictest of the new controls,
An Additional Buyer’s Stamp Duty These measures, coupled with has continued to grow, driven by always been viewed as a reliable store of wealth. Savings rates in which include higher deposit requirements and limitations on
(ABSD) of 15% must be paid by a general slowing in Singapore’s domestic owner-occupier demand. China are exceptionally high by global standards. Gross savings as second property purchases.
foreign buyers, while Singapore's economy has resulted in a significant Singapore is unusual in that 80% a percentage of GDP stand at 51%, according to World Bank Data
permanent residents are levied reduction in transaction levels and of the resident population live in (the figure is 17% in US and 13% in UK). Recent slowing economic growth meant price growth fell to very
an additional 5% for their first falling prices in the prime residential publically governed and developed low rates by Chinese standards across the country, just 1.4% in
property and 10% for their second market. In common with high-end housing, managed by the Housing This, and the rapid growth of Chinese wealth, fuelled a massive 2014. However, consecutive interest rate reductions and a pick up
and subsequent properties. markets across the globe, Singapore’s and Development Board (HBD). Unlike wave of investment into residential real estate over the last two in sentiment have stoked transactional activity in leading cities and
Singapore citizens face additional prime market has been the one most most social housing in the developed decades. Between 2003 and 2010 the Chinese economy enjoyed resulted in strong price growth. 27 out of 70 cities tracked by the
duties of 7% for their second and favoured by international buyers while world, which is rented, 95% of HBD close to double digit annual growth, and the average price per National Bureau of Statistics recorded a month-on-month increase
10% for their third properties and average mainstream property remains properties are owner-occupied and square metre of new dwellings in China more than doubled. in new build residential prices in June 2015 (compared to only one
subsequent properties. In a bid to predominantly domestic. sold on 99 year leases. They may be city Shenzhen seeing price growth at the beginning of 2015). The
re-sold freely on the open market (to In efforts to curb this rapid growth and keep affordability levels outlook remains positive as the pick up in sales volumes and a
citizens) once minimum occupation in check, the government introduced a series of policies to curb stabilisation of pricing are expected to lower the inventory level. This
figure 32
requirements have been met. investment purchases. First tier cities, such as Shanghai, have seen should result in a healthier market in the mid to long run.
Singapore market performance 2006-2015 With no changes to the current
government curbs or cooling measures
n Singapore - transactions n Singapore - prices
on the horizon, the private residential
200 50,000
market is expected to remain soft.
Further falls may be seen in the prime
Shanghai Against this, new supply is likely
to continue to be delivered but at a
districts as it strives to meet the
demands of a rapidly expanding
180
45,000 markets. This could present buying slower rate than previously, meaning population and economy.
opportunities as underlying demand Shanghai is China’s largest city prices are likely to hold up much One of the most successful
40,000
160 for real estate is strong, as evidenced and a global financial centre. more than in regions where building infrastructure investments has been
by commercial property markets. It is host to the world’s busiest has been unfettered. Developers’ the Shanghai metro. Despite being
35,000
140 The prime office market in Singapore container port and plays a key role confidence in the Shanghai residential one of the newest systems – the line
30,000
remains buoyant (the result of a dearth in China’s industry. The city attracts market, and the general wariness of only opened in 1993 – it is one of the
120 25,000 in new supply since 2005) and prime migrants from across the country investing in lower-tier cities, means most heavily used, with 2.5 billion
office rents are forecast to increase by looking to take advantage of its demand for new land plots will likely journeys taken each year.
20,000
100 3% in 2015 as a result. n job opportunities. These factors remain fierce. This means Shanghai is Such pressure on transport has
15,000 have driven its success in recent unlikely to see the oversupply that is led to a trend toward decentralisation
80 decades and continue to underpin said to dog some Chinese cities. in Shanghai. Investors are looking
15%
10,000 its prospects for the future as Shanghai has seen strong growth to locations such as Hongqiao
60
5,000
the Chinese workforce becomes in the value of small apartments as Transportation Hub, at the centre of
increasingly mobile at the national large numbers of young professional which the largest railway station in
40 0 and international level. migrants seek city-centre living. Asia by floor space, linking together
Rate of Additional Buyer's While Shanghai is an international A shortage of this type of unit has local, high-speed intercity rail and
Q1 06
Q3 06
Q1 07
Q3 07
Q1 08
Q3 08
Q1 09
Q3 09
Q1 10
Q3 10
Q1 11
Q3 11
Q1 12
Q3 12
Q1 13
Q3 13
Q1 14
Q3 14
Q1 15
Stamp Duty in Singapore city, it is still dominated by domestic pushed up prices and forced this metro. New mixed-use developments
businesses, investors and occupiers. group into secondary locations. To also anchor these decentralised
Source: URA This means its residential markets are combat this, Shanghai is using large communities, providing employment
driven mainly by domestic factors. scale infrastructure investment to centres and ancillary community and
The average price of apartments in unlock these decentralised business shopping facilities. n
the city rose from RMB9,313 per sq m
($138psft) in January 2006 to a high figure 33
of RMB30,016 per sq m ($446psft) in China market performance 2006-2014
December 2014, an increase of 222% n Floor space sold (sqm, thousands) n Average price (per sqm)
in just eight years. As at June 2015,
6,000 1,200,000
average prices stood 14% above this
Floor space sold (sqm, thousands)

level, the result of easing policies and 5,000 1,000,000
improving sentiments. Rental growth
Average price (per sqm)

has failed to keep pace with capital 4,000 800,000
value growth, and gross yields have
been pushed down to 2.3%. 3,000 600,000
The government is taking steps

2,000 400,000
– directly or indirectly – to support
the market by easing policies such 1,000 200,000
as giving priorities to mortgages
for first-home buyers and relaxing 0 0
2006
2007
2008
2009
2010
2011
2012
2013
2014
the definition of ordinary housing.
Sentiment has improved due to lower
 Singapore's prime property is favoured by international buyers borrowing costs and taxes. Source: National Bureau of Statistics
 Land availability in Sydney is restricted

through geographical limitations
AUSTRALIA
Australia avoided a house price crash like those of Western The unemployment rate is comparatively high, at 6.0%, in part
economies because of its high and growing economic wealth due to a slowing of the country’s mining industry, which had
at a time when developed economies were contracting. At supported the economy for two decades. Australia’s slowing
the same time it avoided a credit boom by retaining strict economy is in part due to its strong ties with cooling Asian
lending requirements. Australia’s geographic position also markets and global demand for raw materials has declined.
helped, supplying a booming Asia with raw materials,
goods and services. In spite of this, residential prices have continued to grow.
Interest rates are at a record low of 2%, having been cut 25
The government response was timely too, it introduced a basis points in May 2015. The market is further supported by
generous scheme to support first time buyers in 2008. This, and foreign nationals, notably the Chinese, who need approval
continued immigration fuelled demand against a shortage of from the Foreign Investment Review Board (FIRB) to purchase
new supply which helped to keep prices growing. property (in common with all overseas buyers), and are
restricted to new property or vacant land.
Australian GDP grew by 2.7% in 2014, which was higher than
2013’s 2.1%, but down on the 3.7% growth achieved in 2012.
Sydney
figure 34
Australia market performance 2006-2015
Prices in Sydney grew by 12.2% in n Australia - transactions n Eight capital cities - prices n Sydney - prices
2014, according to ABS, compared
7.2 %
to an average of 6.8% across the 170 600,000
eight capital cities as a whole.

160
Rents are among the highest in 500,000
Australia – but rising at a slower 150
rate than capital values so yields

Australia's
Price index (Q1 2006 = 100)

are diminishing. (Currently Sydney's 140 400,000
residential gross yields stand at
annual export 4.1% which is lower than other 130
300,000
growth 2014
Australian cities and asset classes). 120
Sydney, in common with most
mature world cities, is restricted by 110 200,000
land availability through geographical
limitations, zoning restrictions 100
100,000
and limited land release. As a
90
consequence, the city suffers from
the same supply/demand imbalances 80 0
of many of its global contemporaries
Q1 2006
Q3 2006
Q1 2007
Q3 2007
Q1 2008
Q3 2008
Q1 2009
Q3 2009
Q1 2010
Q3 2010
Q1 2011
Q3 2011
Q1 2012
Q3 2012
Q1 2013
Q3 2013
Q1 2014
Q3 2014
though it has far fewer international
buyers competing in its local markets.
Recently, the strong residential Source: Australian Bureau of Statistics
market has created an expectation of

capital gains which has encouraged
domestic investors and increased oversupply and putting capital values
rental supply, particularly in the new more on a par with rents. Sydney
build sector. This has suppressed seems set for a period of slower capital
rents and yields, suggesting that the growth while owner occupier and
market may have become overly rental occupier markets readjust in line
speculative. with each other.
While, in the longer term, we expect In the medium to long term,
strong occupier demand on the back prospects for the city still look good.
of a strong economy and immigration Demand for city centre locations is
from Pacific Asia, it seems likely that still strong, particularly from younger
there will be some adjustment in the generations. This means that ‘City’
near term. Slower capital growth Sydney is set to perform best over
will likely start to redirect investors the next five years and development
to other Australian cities or asset opportunities will continue be focused
classes, thereby correcting any letting on an intensification of the centre. n  Demand for property remains high in Sydney
Outlook
a sense of adventure Research Publications
n The World and London
n 12 Cities | US Special
n Tech Cities
Investors are seeking opportunities in more peripheral locations and
higher-yielding secondary property as an alternative to first-tier cities
O
verall, we sense at the discounted values of the post
the global market 2008 market.
cycle is now moving Those looking at the longer term
on a stage. Both will find an increasing number of new
occupiers and opportunities in resort property, both
investors have been clinging to established locations in which Asians
first-tier cities and prime property start buying and in new locations and
like limpets to a rock in times leisure property types within Asia. For more publications, visit savills.com/research
of global turmoil and economic We foresee an increasingly Follow us on Twitter @Savills
uncertainty but, as this abates, they diversified global residential property
are becoming more adventurous. market offering considerable
Investors are now beginning to opportunity and we have covered
peel away from the expensive centre some of its more important markets
and seeking alternatives in more and market trends in this report. n
peripheral locations and higher-yielding
secondary property.
They are also looking at cheaper
and higher yielding second-tier cities,
especially in Europe and the USA,
where there may be prospects of
economic outperformance and high
population growth. Non-city property Resorts are regaining
such as resorts that were popular in attraction to investors
the nineties and noughties are also
regaining their attraction, particularly
Savills team
World Research International Residential
Yolande Barnes Paul Tostevin Hugo Thistlethwayte

World Research World Research Head of International Residential (London Desk)
+44 (0) 207 409 8899 +44 (0) 207 016 3883 +44 (0) 207 409 8876
ybarnes@savills.com ptostevin@savills.com hthistlethwayte@savills.com
Savills plc
Savills is a leading global real estate service provider listed on the London Stock Exchange. The company established in 1855, has a rich heritage with unrivalled growth. It is a company
that leads rather than follows, and now has over 600 offices and associates throughout the Americas, Europe, Asia Pacific, Africa and the Middle East.
This report is for general informative purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus,
agreement or other document without prior consent. Whilst every effort has been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss
arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without written permission from Savills Research.
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Savills World Research

World Residential Markets

differ across the globe

Translated into global investment tenure norms means that housing

Index (Q4 1999 = 100)

Index (Q4 1999 = 100)

and consistent lending environment significantly below-average or even

Prime Market Dynamics

Key World City - highly

Key World City - regionally

Key buyer flow canada Moscow

alps Rio de Janeiro

Source: Savills World Research

London 3.2% 4.2% 3.3% 4.8% 1.9% of wealth in emerging economies,

in the French Riviera are currently

Typical price - prime 2 bed apartment

Typical price per square foot

Typical price - prime 4 bed villa/chalet

Typical price per square foot

Marbella (inc. Sotogrande)

Tuscany & Umbria

St Kitts & Nevis

Forecasts ■ Very favourable to housing prices Modest falls

Savills World Residential

internationally and/or in relation to historic trends) Paris

Likely top performers are those Geneva

which have seen strong population 14 Switzerland

 Prime London property is

EUROPE UNITED KINGDOM

Transactions (12 month total)

markets, including areas such as 130

 The Riviera is a home location for the global super-rich

1850 attracts UHNWI purchasers

thanks to a diverse demand base and performers through the global

Housebuilding Peak and current house-building rates

Marbella & Sotogrande Madrid

Real, a prime district within reach Chinese, the major recipients of

Transactions (12 month total)

The premier Swiss ski resorts active in Switzerland, notably those

 Prime property prices are

NORTH AMERICA USA

Transactions (12 month total)

Miami Los Angeles

“San Francisco's rental market

Tourist arrivals 2014

Trinidad & Tobago

Turks & Caicos Islands

British Virgin Islands

Antigua & Barbuda

St. Kitts & Nevis

St. Vincent & the Genadines

Barbados in Barbados (more than 1,500)

AFRICA & THE MIDDLE EAST SOUTH AFRICA

Transactions (12 month total)

Regional economic statistics and trend

UNITED ARAB EMIRATES 4.5%  4.2%  1.0% 

 Land supply is limited in Cape Town Source: URA

UNITED ARAB EMIRATES

Price index (2006 = 100)