Knight Frank has published its latest assessment of 44 cities worldwide – and it shows luxury property shifting into lower gear.

Prime residential prices grew at an annual rate of 2.9% in the third quarter of 2024, marking the lowest growth this year and falling well below the 10-year average of 4.6%. 

Recent rate cuts have supported growth over the past few quarters, but the slowdown in annual growth suggests a need for further cuts to sustain future price increases. The European Central Bank’s rate cut in October, coupled with the Fed’s substantial cut in September and an anticipated reduction in early November, indicates that interest rate constraints on the global housing market could ease further into 2025. 

Among the 44 cities tracked, a majority (29 out of 44) saw a prime residential price increase compared to last year. 

This positive trend was similarly reflected in quarterly comparisons, with most cities (31 out of 44) reporting price increases over the previous quarter. 

Manila continued to thrive, with remarkable growth of 4.6% over the past three months and an annual increase of 29.2%, driven by strong economic growth and rising consumer confidence. 

Tokyo, despite a 2.8% quarterly decline, maintained robust annual growth of 12.8%. However, with the Japanese Yen strengthening and the Bank of Japan among the few central banks expected to raise rates, the housing market may face slower growth in the coming quarters. 

Dubai, a hotspot for price growth since the pandemic, is transitioning to more sustainable growth patterns. Prime residential prices have steadily increased by 0.5% over the past quarter, resulting in a total price growth of 16.9% over the past year. The emirate’s remarkable performance is evident, with Dubai’s prime market soaring by an astonishing 190% since early 2020, outperforming all other cities in the index during that period. 

Liam Bailey, Knight Frank’s global head of research, says: “The recent slowdown in global price growth reflects the need for additional stimulus through further rate cuts before prices can strengthen. We expect the anticipated wave of cuts into 2025 to support higher house price growth in the medium term.” 

You can find the latest report here: https://www.knightfrank.com/publications