Vancouver’s got the world’s weakest luxury-housing market
Josh Sherman
Livabl
It’s not a repeat performance worth boasting about.
Despite some signs of stabilization in the broader Vancouver housing market, the luxury segment is still dead last in a regular global ranking.
Each quarter Knight Frank, a major real estate consultancy, ranks luxury markets around the world in terms of price performance.
Vancouver’s annual luxury home price decline of 13.6 percent in the second quarter planted it firmly in 46th place out of 46 markets, according to Knight Frank’s Prime Global Cities Index.
Knight Frank typically considers properties priced in the top 5 percent of a market to be luxury homes.
Vancouver has occupied last place since 2018’s third quarter.
No other city experienced a double-digit annual collapse this time around, although Istanbul was close with prices plunging 9.9 percent annually.
Vancouver is also miles away from Toronto in terms of price trajectory. There was a whopping 17.4-percentage-point difference between the two markets.
Toronto, the only other Canadian market the index captures, placed 13th, with prices climbing 3.8 percent annually and 2.8 percent on a quarterly basis.
If there is a bright spot for well-heeled homesellers in Vancity, it may be that the rate of quarterly price declines is decreasing.
For example, Vancouver luxury home prices were down 2.4 percent in the second quarter compared to the first, but that’s a full percentage point less than the previous quarterly drop.
Istanbul and Tokyo were the only cities to post larger quarterly declines, at 5.1 percent and 2.6 percent, respectively.
But weaker conditions are widespread, with the 46-city index price increasing 1.4 percent in the first half of the year, well short of the four-year average (3.8 percent).
“Sluggish economic growth explains the wave of interest rate cuts evident in the last three months as policymakers try to stimulate growth,” writes Kate Everett-Allen, a partner at Knight Frank, in the index report.
“Much hinges on the next three months with stronger headwinds on the horizon we expect the index to moderate further in the second half of 2019 before strengthening in 2020,” Everett-Allen continues.
Prime property prices increased on a year-over-year basis in 35 out of 46 markets, led by Berlin, where prices soared by 12.7 percent annually, remaining unchanged from the previous quarter.
Ditto for Frankfurt, which had a slightly slower pace of luxury home price inflation of 12 percent.
© 2019 BuzzBuzzHome Corp
