Seoul’s luxury housing has seen the greatest price growth in the world so far this year, according to a report Tuesday by global property consultants Knight Frank.
Luxury prices in the South Korean capital soared nearly 25% in the first quarter of 2018 compared to last year, followed by Cape Town, South Africa, where prime prices rose 19.3%. While these and a few other cities have seen their high-end housing markets heat up over the past year, regulatory and economic shifts have cooled prime real estate worldwide. The quarterly index of 43 prime cities slowed in the first quarter as prices worldwide grew an average of 4.8%.
Guangzhou slipped from its place at the top last year to No. 3, as cooling measures in China have sought to stem speculation and frenzied price growth nationwide. Prime prices there grew about 16% in the year ending in March.
Knight Frank defines luxury as the top 5% of the market in each city.
Government measures in Seoul, including new taxes placed on second homes and tighter lending, have also sought to stem runaway price appreciation. Still, the city’s luxury hub of Gangnam continues to see speculative activity, according to Knight Frank.
Meanwhile, major European cities were at the top of the chart.
“Edinburgh and Zurich join Berlin, Paris and Madrid in the top 15 this quarter,” said Kate Everett-Allen, head of Knight Frank’s international residential research.
Berlin was the continent’s best-performing city, with prices rising nearly 11% in the first quarter.
The 2010 global credit crisis hit the Eurozone particularly hard, and cities are finally seeing prices return to pre-crisis peaks. Relatively modest luxury prices in places like Spain, France and Germany have allowed prices more room to grow compared to top-tier cities like New York or Hong Kong.
The world’s primary hubs for luxury real estate saw less impressive growth. New York recorded only a 1% rise in prime prices in the first quarter, while prices in London fell 1.1%.
The worst-performing market was Stockholm—which UBS Group recently ranked at the most overvalued in its annual housing bubble report. Prices in the Swedish capital fell 8.4%.
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