Cities shine
The latest results of the PIRI 100 - our unique Prime International Residential Index - reveal a diverse range of global performance trends. 

Uncertainty, in all its guises, proved the watchword of 2019. While wealth continued to rise and interest rates in most advanced economies remained at record lows, a slowing global economy, property taxes and, in some cases, a surplus of luxury homes for sale, all weighed on prime property price growth.

The results of our Prime International Residential Index (PIRI), now in its 13th year, reflect this. While growth ranged from double-digit hikes in some markets to significant falls in others, we saw a shift in the trend of moderating growth that has prevailed since 2013. In 2019, the 100 locations covered by PIRI recorded average price rises of almost 2% - up from 1.3% in 2018, but still some way off the 2.8% recorded in 2013.

Urban power
This year's PIRI top ten is occupied by a mix of world regions as well as advanced and emerging markets. Cities dominate, as opposed to second home markets and, despite the euro zone's economic fragility, four European cities make an appearance: Frankfurt (+10.3%), Lisbon (+9.6%), Athens (+7.0%) and Berlin (+6.5%).

Surprisingly, Athens and Cyprus (+4.3%) are now outperforming their Italian counterparts, but they are rising from a low base, with prime prices still around 35% below their 2008 peak. The Italian non-dom tax may yet prove a game changer, offering UHNWIs the opportunity of a €100,000 flat tax on global income in return for a slice of the Italian lifestyle. However, Greece is hot on its tail having replicated the scheme in 2019.

In Asia, the US China trade war, protests in Hong Kong and, in some markets, more stringent property regulations, tempered activity in some markets and diverted capital to others. Gone are the days of 30% annual growth in China's metropolises: Seoul and Taipei are now the region's frontrunners with annual growth of almost 9% and 8%, respectively.

China's top-tier cities saw price growth drift lower in 2019. As my colleague David Ji, our Head of Research for Greater China, points out: "Much of 2019 was dominated by an escalating trade war with the US and this, combined with the government's determination to curb price inflation via a range of cooling measures, led to more muted price growth."

Hong Kong resilient
David adds: "Hong Kong (+2.9%) surprised on the upside in 2019, with a mortgage cap reduction and three interest rate reductions mitigating some of the impact of the political volatility."

Singapore (+1.2%) is firmly back in the spotlight: higher rates of stamp duty for overseas buyers are no longer considered draconian, rather a trade-off for stable politics and a secure currency in a city-state that applies no capital gains tax or estate duties.

Once a stellar performer, prime prices in Auckland (-0.7%) are correcting in response to the 2018 foreign buyer ban and economic headwinds. However, according to Ian Little, Research Manager at our partners Bayley's in New Zealand, "a recent rise in enquiries from expats and lower interest rates are softening the impact".

Sydney leads the five Australian markets tracked by PIRI with price growth of 3.7% - constrained supply and cheaper finance are underpinning prices.

Mounting challenges, both economic, political and climatic, are curtailing prime price growth for our African cities. Prime sales in Cape Town held up but prices dipped (-1.5%) as longstanding vendors proved more flexible on price.

Dubai's hosting of Expo 2020, the first to be held in the GCC region, along with an overhaul of investment visas - as well as greater powers for Dubai's Real Estate and Regulatory Agency (RERA), which empowers it to oversee the strategy for all future real estate projects - are together adding some optimism to the market. The annual rate of decline slowed to -0.7% in 2019.

London calling
Against a backdrop of turbulence and protracted political wrangling surrounding Brexit, London registered a fall of 2.6% in 2019. However, the Conservatives' decisive victory in December's general election provided some much-needed clarity and the market looks set to gain traction in 2020. Vancouver (-8.3%), once a favoured market with Chinese buyers, has seen a deluge of regulations since 2016, from a 20% foreign buyer tax to occupancy taxes, and was the PIRI 100's weakest performer in 2019. However, the annual rate of decline has slowed since Q1 2019 and sales increased by 87% in December 2019 year-on-year, according to our local associate Kevin Skipworth of Dexter Realty, referencing sales numbers from the Real Estate Board of Vancouver. This suggests a potential change in direction, albeit a slow one.