Luxury property prices sink in London, while the rest of Europe booms
A new survey carried out by the Royal Institution of Chartered Surveyors has shone a light on the shrinking prices of London’s luxury property market.
The professional body found that, for homes valued at £1m or more, nearly three-quarters of properties are being sold for less than the asking price. The survey also revealed that, for homes listed between £500,000 and £1m, nearly two-thirds are changing hands for lower than the initial asking price.
It is thought that a combination of uncertainty over the current political climate, an increased cost of moving, a lack of fresh properties coming onto the market, and a recent interest rate rise, is the cause for this slump – and it appears to be taking its toll on the performance of the whole UK housing market, not just the luxury end.
Real estate consultancy, Knight Frank has also noticed a dip in the luxury home market, having recently reported that central London’s top-tier properties have been underperforming compared with other European cities such as Paris and Madrid.
Looking back over the last 12 months, the Knight Frank Prime Global Cities Index found that London’s premium property prices have declined 4.6%, compared with a global 4.2% increase in the prices of extravagant homes across 41 other cities.
In Europe, for example, prices for luxury homes in Madrid have climbed 11.9% over the last year. The Spanish capital is closely followed by Paris, whose luxury property sales saw an increase of 11.3%. The German city of Berlin also performed very well, with prices increasing by 7.3%.
These reports lead us to question – is London losing its status as the world’s luxury hot spot?
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