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Luxury home rents will remain strong globally in 2023, exceeding capital values in 28 of the 30 cities tracked by the Savills World Cities Index, according to a report released by the British real estate firm on Wednesday. Ta.
Luxury rental prices rose an average of 5.1% last year, compared to an average home price increase of 2.2%.
“Despite economic uncertainty, the luxury residential rental market has proven resilient in 2023,” said Kelsey Sellers, associate at Savills World Research. “Continuing the trend from last year, prime rental growth outpaced capital value. This is primarily due to a lack of inventory in the global prime market and a lack of interest in purchasing real estate. This is due to an increased level of demand from individuals and families as the economy and interest rate situation stabilize. ”
According to the report, Lisbon is by far the leader in rental growth, with luxury rentals increasing by an average of 39% annually and 22% in the second half of 2023 alone.
“Lisbon has seen an influx of people moving to the city, attracted by its climate, quality of life and strong business environment. However, rising house prices and rising interest rates have put Lisbon in the buying market. Some people are reluctant to participate,” Sellers said. “The supply of housing in the rental market has not kept pace with demand, leading to an increase in rental prices across Portugal, which remains relatively high compared to other rental markets in Europe and will continue to attract new renters. and is likely to continue to attract investors” next year. “
Singapore led the Asia-Pacific region with rental growth of 12.3%, down from 32.3% in 2022. Luxury rental prices in Hong Kong also rose by 5.9% due to higher down payment requirements, higher interest rates and an influx of housing. Savills said the proportion of buyers from mainland China drove prospective buyers to the rental market.
Looking to the year ahead, luxury rental prices are expected to rise slightly in 30 cities around the world, although price growth may be lower than in previous years.
“Looking to the year ahead, key rental prices in the 30 cities included in the World Cities Index are expected to register modest increases as key buyers continue to look to the rental market. Growth is likely to be below all-time highs, “average,” Sellers said.
Savills said Amsterdam is expected to lead this year’s rental growth index, rising between 6% and 7.9%, as demand soars alongside limited supply and tighter regulation of the private rental sector. I predict that.
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