New York City, London luxury property prices dip as Asia real estate soars

LUXURY home prices in many Asian cities are growing, bucking a downward trend in more established markets including New York and London.

Prime property prices – defined as the top 5 per cent of the market – fell 0.3 per cent in New York and 1 per cent in London in the final quarter of 2024 compared to the same period a year earlier, according to real estate firm Knight Frank. While there are signs that New York’s luxury market could bounce back, London’s is struggling after its worst year since 2020. Hong Kong, Frankfurt and Melbourne also posted declines.

But in Seoul, Dubai and Tokyo, luxury home prices soared, gaining 18 per cent, 17 per cent and 13 per cent, respectively.

Higher borrowing costs and political instability have hampered some high-end property markets across the world. But prime real estate prices broadly have turned a corner amid strong economic growth and demand from wealthy investors, with the 44 cities analysed in the report posting average annual price growth of 3.2 per cent.

Housing prices have surged in Seoul despite recent political instability. In Dubai, luxury housing is growing more extravagant, with US$100 million mansions built to lure the world’s ultra-rich. A weakened yen has attracted foreign buyers to Tokyo despite higher borrowing costs.

Knight Frank’s prime property index posted its strongest performance since the first quarter of 2024, when it recorded 4.1 per cent annual growth. Some of the lower growth can be explained by the persistence of high inflation and interest rates dampening demand. Still, 34 out of the 44 cities examined in the last quarter recorded positive year-over-year price increases. BLOOMBERG