Global property consultancy Knight Frank has launched the Prime Global Rental Index for Q1 2016. Financial hubs Singapore and Hong Kong have seen luxury rents weaken.
The index, which tracks the change in prime residential rents across 17 cities globally, fell for a third consecutive quarter with rents falling on average by 0.5 percent in the year to March 2016.
Of the 17 cities tracked by the index, 11 have recorded flat or falling prime rents over the last 12 months.
Shanghai Remains Strong
Real estate markets in Asia have been sensitive to the wider macro-economic environment in 2016, as demonstrated by the prime residential rental performance in the seven major Asian cities tracked.
«Singapore and Hong Kong, the two cities with significant export exposure have seen rents soften, while mainland Chinese cities have seen more varied performance, with Shanghai still seeing rental growth on the back of a robust local economy. Looking forward, the political uncertainty in Europe and the US will likely weigh on the region for the second half of the year, depressing rental growth prospects,» said Nicholas Holt, Head of Research for Asia Pacific.
Under Further Pressure
Toronto leads the rankings with prime rents increasing by 8.9 percent in the year to March 2016, followed by Guangzhou at 5.3 percent increase. North America continues as the strongest-performing region with prices rising by 3.3 percent on average. Out of 17 cities, London slipped to 11th with prime rental prices slipping 1 percent year-on-year, the lowest annual rate since May 2014. In the wake of the Brexit vote this figure might come under further pressure.
