Trophy home sales in North America, Europe could cool in 2012

TRD New York /
Nov.November 28, 2011 07:22 PM

As the super-wealthy become wealthier and continue to seek so-called “safe-heaven” investments, prime residential real estate markets are likely to continue to see price increases in 2012, Knight Frank’s Prime Global Forecast said today. However, if calamity strikes in European markets, even high-end residential property in global cities may suffer, the logic goes.

“If the euro was to collapse, or a similar catastrophe was to strike, all bets really would be off and we would expect much weaker performance across all of our prime markets,” Liam Bailey, head of residential research for Knight Frank, said in the report.

While the recovery in 2009 sent many investors clamoring for trophy real estate, that trend may come grinding to a halt if and when prime markets are “undermined by domestic economic reality,” as Bailey put it. Weak prices for mid- and lower-market housing, combined with targeted tax and regulatory changes could put a damper on prime housing prices in North America and Europe.

In both Europe and Asia there are also marked disparities between cities, as Hong Kong is expected to see price declines, with Bejing prices projected to go up between 5 and 10 percent. Prices in Geneva and Zurich are expected to drop, while Paris and Moscow will see price increases.

Kate Everett-Allen, global data coordinator at Knight Frank’s international residential research arm, was a bit more optimistic. She said she expects prices in most prime markets to remain flat at worst, and foresees Jakarta and Nairobi, the markets projected to have the strongest 2012, to rise 20 percent in the next year. — Guelda Voien

Related Articles

Protesters in Hong Kong (Credit: Getty Images)

As protests rage on, Hong Kong’s elite scope out $20M houses abroad

Clockwise from left: JLL's Michele Mahl, Savills' Peter Hennessy, Eastdil Secured's Will Silverman, Christie’s Brian Meier, Nest Seekers' Mike Fabbri and Compass' Charlie Attias 

These were the biggest broker comings and goings of 2019

Jordan Roeschlaub and Dustin Stolly, Newmark Knight Frank

Co-heads of Newmark’s debt team host holiday bash

Brett Siegel, Jean Celestin, and Evan Layne with Newmark Knight Frank offices at 125 Park Avenue (Credit: LinkedIn and Google Maps)

Newmark poaches Eastdil Secured sales team

Robert K. Futterman (Credit: Southampton Town Police)

Futterman’s latest DUI wouldn’t factor into termination case: legal expert

Jimmy Buffett and a rendering of Margaritaville Times Square (Credit: Getty Images, Margaritavilla/The McBride Company)

Sued away again in Margaritaville: Newmark claims chain breached exclusive contract

From left: London, Shanghai and Paris

The TRD weekly global digest

Tom Citron

Newmark’s Tom Citron heads to Colliers