The first Knight Frank Global Development Review report provides trends in the market for luxury residential development in 14 key locations around the world, from Barbados to Vietnam. The report reveals that 50%-60% of demand for new-build property in London and Europe came from non-domestic investors in 2011.
- The 10 future locations to watch for new luxury developments are: Abu Dhabi, Japan, Milan, Barcelona, Vienna, Munich, US (Los Angeles and Florida), Africa (game reserves), Canada (Montreal and Vancouver), Brazil (Sao Paulo and Rio)
- The availability of funding for development remains an issue both in the West and in Asia but more so in Europe and the US.
- Bank funding still predominates in most of the global development centres, providing around 75% of all development finance.
- Construction and completion volumes have improved significantly in Asia-Pacific, they have fallen back in Europe and the US.
- Luxury homes in prime global cities will retain their safe haven reputation, but they will attract fewer speculative investors seeing a short term gain.
- Development markets in Singapore, Sydney and Hong Kong have all been beneficiaries of investors looking to find a secure home for their money.
- Mumbai has the highest number of residential completions to date in 2011.
Liam Bailey, Head of Residential Research comments:
“Global prime development was consistent before the credit crunch, rising development volumes were met by rising demand and concurrent growth. After 2008, luxury development volumes across the world collapsed and have since begun to slowly rise as confidence returns. The main casualties of the recent economic turmoil have been emerging locations which were tipped as “the next big thing” in the late 2000s. As the market “contracted” in 2008, buyers increasingly focused on established “safe haven” locations. As the markets returned to growth in 2009 it was these locations that retained popularity and saw the highest levels of investment and activity. As a result locations like New York, London, Paris, Monaco, Hong Kong and Singapore gained ground while less established prime markets in the Middle East, Europe and North America have struggled to gain traction."