Global demand for luxury property shows signs of receding

Luxury property demand is seen to ebb

Global demand for luxury property shows signs of receding, with prices worldwide rising at the slowest rate since the financial crisis began.

The growth of prime property prices – the top 5 per cent of property by value – in Europe, North America and Asia has outstripped the rest of the housing market during the downturn, fuelled by investors looking for safe places to store wealth.

During the three months to October, however, the price of the top slice of the world’s housing market rose 0.5 per cent, according to research published by Knight Frank, the property group. That rate of growth represents the slowest increase since the start of 2009, suggesting the market for prime property could be nearing its peak.

“Prime property in the world’s global cities has been tagged a ‘safe haven’ investment by savvy minded investors for the past three years,” Knight Frank said.

The company added that worries about the sovereign debt issues in the eurozone and US were affecting buyer confidence.