Of the 30 cities analyzed by real estate firm Savills Plc, Lisbon saw the strongest increase in the value of prime residential properties, up 4.2 percent, largely thanks to an influx of wealthy foreign buyers. Amsterdam, Madrid and Athens saw increases of more than 3 percent, according to an index that tracks prime real estate in cities around the world.
Capital value growth in these destinations far outstripped the 0.8% average recorded across all cities in the Savills Index, which was compiled by Bloomberg News ahead of its publication.
As Europe faces a housing supply squeeze due to high construction costs and development challenges, Americans have become key prospective buyers in many southern European cities. A comparatively strong dollar and growing interest in regional lifestyles are attracting buyers from the US, Savills said in the report.
The value of prime properties in Dubai has also risen as the Middle Eastern hub continues to attract wealthy workers with lower taxes and a luxury lifestyle. While confidence in the high-end property market has weathered slumps in many of the world's biggest economies, some buyers remain cautious as they await what will happen on interest rates.
In the US, persistently high interest rates have thrown the country's housing market into disarray, Savills said as many American homeowners take out 30-year, fixed-rate mortgages, few are willing to re-enter the housing market and risk increasing monthly payments their. Core home prices fell in three out of four US cities in the first half of the year.
Growth in rental costs continues to outpace that of sales values around the world, Savills said. Supply constraints in many cities in Europe, the Middle East and Africa mean that those looking to rent premium properties continue to struggle with high rents. No EMEA market tracked in the index saw a fall in rental prices between December 2023 and June 2024.
Again, Lisbon led the pack, along with Dubai and Bangkok. Rents rose 7.5% in the Portuguese city in the first half of the year. Athens, Barcelona, Amsterdam, Berlin and Cape Town all saw rents increase by more than 3% in the first half of 2024, with Athens seeing a 4.6% increase over the six-month period, according to the report . This was much higher than the average growth rate of 2.2% in the 30 cities tracked by Savills.
