Could 2023 be the year that London outperforms the other Prime cities in the property market?
It is no secret that the property market is booming at the moment. The knock-on effect of Covid has meant that property sales numbers and prices are at an all-time high. This is true not only in the UK but also worldwide.
Particularly within what are known to be the Prime cities.
What is a prime city?
In its simplest definition, a prime city is the biggest city in each country.
A Prime city in the world of property is a valuation-based list that tracks the movement of residential prices in over 45 cities worldwide. It is put together by the Prime Global Cities Index, which then presents the information for each of these cities and how they perform against one another.
Some of the Prime cities that are tracked include:
Miami
Los Angeles
Paris
Madrid
Seoul
Vancouver
Melbourne
And of course London.
How is London performing?
It comes as little to no surprise that the Prime cities in each country have all seen growth in their own respective property markets. In 2023 this is expected to be the case, although, for the UK, the energy price and cost of living crisis could change the path somewhat.
That said, during the next 12 months, it is thought that the weaker Pound and the rise in international buyers looking to London for their property investments will positively impact how London performs against the other Prime cities in the world.
In fact, by 2023, it has been predicted that the house price growth in London could be as high as 6%. This means that London will be the third highest performing Prime city.
The top five are going to look somewhat like this:
Miami, with 8%
Los Angeles, with 7%
London, with 6%
Madrid, with 6%
Seoul, with 5%
Isn’t the market slowing down?
The answer to this is yes; around the world, it has been seen that the property market has been slowing down in its performance, particularly when this is compared to the post-pandemic uplift that was seen.
Over 25 cities, the Prime prices are expected to rise around 4.4% on average during 2022. However, six months ago, this figure was 6.1%.
Looking forward to 2023, the predicted growth is even lower with it dropping to around 2.8%
There are lots of reasons why it is thought that this will be the case. Changes to certain cities can impact their performance and, in turn, the average. Vancouver and Melbourne have stated that they will ban foreign property purchases during 2023, affecting how many properties are sold in the area.
As well as this, the recession has meant that there is less money to free up for a mortgage or to save for a property purchase. At least for some. There is an increase in inflation and, of course, mortgage rates too.
All of these things come together to cause a decrease in the property market boom. Although it is not yet known how much of an impact this will have in the long-term and the short-term. For the time being, the property market worldwide is still going strong.
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