Singapore home to biggest rise in luxury house prices among 20 key international markets in Q2

Monaco stays at the top as the most expensive city for luxury real estate, Knight Frank study reveals

The New Economy Forum is being held in Singapore this week. Getty Images

Prices for luxury properties rose 11.5 per cent in Singapore, the most among the 20 key global cities during the second quarter of the year. There, $1 million buys only 37 square metres of prime residential space, as rising demand from foreigners and higher land costs have inflated rates, according to a new study

The rise in Singapore is in contrast to Dubai, where prices have declined by under 1 per cent during the same period and the same amount of money affords investors 137 square metres of space in some of the most desired locations, according to the half-year update of real estate consultancy Knight Frank's Wealth Report released on Thursday.

Different values

“Property market regulations continue to determine the direction and volume of capital flows. Singapore, Hong Kong and Vancouver have all seen new macro-prudential measures introduced in the last six months,” said Kate Everett-Allen, a partner for international residential research at Knight Frank. “Singapore leads our annual rankings to Q2 2018, but the recent increase in stamp duty for foreign buyers and developers introduced in July 2018 will result in more moderate price growth.”

Investors, she said, may not like the newer regulations in some jurisdictions which, in many cases add to their bottom lines, however, these rules have improved market transparency, enabling some investors to move into emerging markets with greater confidence.

But as other global markets enact a range of macro-prudential measures, Dubai, alongside other emirates in the UAE, has announced a host of changes to ease residency and investment laws to spur its property market.

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"This has boosted investor confidence in Dubai, where almost 60 per cent of transactions recorded in H1 2018 originated from international buyers," said Taimur Khan, research manager at Knight Frank Middle East.

Residential sales and rental prices have faced headwinds in the past few years on the back of an economic slowdown brought on by a three-year oil price slump. The government cut spending and businesses shed jobs to control costs, which dented investors’ confidence and demand for properties.

Both rental and sales values are expected to soften further, albeit at a slower pace this year, and analysts and economists expect the market to strengthen as economic activity picks up momentum next year.

Meanwhile, prices for luxury properties in Tokyo have risen 9.4 per cent on the back of improved economic sentiment, the city's relative value compared to other Asian destinations such as Hong Kong and Singapore, and investment ahead of the 2020 Summer Olympics, the study revealed.

In Europe, London prices fell 1.8 per cent in the second quarter. Prices in Madrid climbed 10.3 per cent, while in Berlin they rose 8.5 per cent and Paris saw a rise of 6 per cent. Domestic buyers in Paris are back, buoyed by an improved economy and cheap finance, according to Knight Frank.

The consultancy's analysis of global property markets also explored how many square metres of prime property can $1m buy in these 20 cities around the world. Monaco tops the list with investors getting only 16 square metres for their million dollars.

The same amount of money buys them 22 square metres in Hong Kong, 29 square metres in London, 30 square metres in New York, and 54 square metres in Shanghai.