Even the super-rich don’t seem to be immune from the property market slowdown,
Knight Frank’s latest Global Super-Prime Intelligence Report, following sales above $10m, showed transactions fell in the second quarter of 2023 to 422.
This number was 11% below the 475 recorded in the first three months of this year and down 13% annually.
That said, sales in the 12-month period up to June of this year – totalling 1,638 globally – are still running well ahead of the 1,009 levels seen pre-pandemic in 2019, Knight Frank said.
Despite the year-on-year decline in overall sales, four markets saw volumes rise, led by Dubai – up 79% annually, Sydney (up 46%), Paris (up 17%), and Geneva (up 7%). The biggest declines over the year were seen in key US markets, led by Los Angeles (down 63%).
Liam Bailey, global head of research at Knight Frank said: “Super-prime sales globally have retreated from recent highs but are still outpacing pre-pandemic levels.
“Dubai continues to lead the pack but London and New York are still seeing healthy volumes. The biggest constraint across a majority of markets in the near term is supply – a lack of new development starts between 2020 and 2022 means a lean 2024 for new delivery, pointing to rising competition for available stock which should act to put a floor under pricing.”
Total sales volumes for the second quarter of 2023 amounted to US$7.3bn across the 12 markets. Dubai leads with a total volume of US$1.5bn, with London and New York also seeing sales above US$1bn. Total sales in the 12 months up to June in all markets stood at under US$30bn, down from the peak of US$40.7bn seen in 2021 but well ahead of the pre-pandemic figure of US$18.6 billion in 2019.
London’s market has remained relatively robust throughout 2023, although it has slowed compared to the levels seen in 2021, according to the report.
Overseas demand has played a role in boosting sales and recent development launches have contributed to the numbers, Knight Frank said.
However, a squeeze in the future super-prime development pipeline in London suggests a potential slowdown in sales activity in 2024 and beyond unless existing property owners can be encouraged to trade up or down from their current properties, the research suggests.
Speaking about the London super-prime market, Paddy Dring, head of Knight Frank’s Private Office said: “The latest data confirms more subdued trading conditions.
“However, with sales still above pre-pandemic levels, this confirms there is still strong buyer appetite, both domestic and overseas. Transactions remain resilient due to the higher prevalence of cash sales compared to the wider market and, with prices in London still down from their 2016 peak, buyers are recognising value in the market and for these reasons we’re expecting a more active autumn.”
It comes as the latest RICS Residential Market Survey for the whole UK housing market showed the most negative readings for house prices since 2009, while respondents reported the largest decline in newly agreed sales since the pandemic.