According to new research by Knight Frank, global super-prime ($10m+) residential sales fell 2.4% in Q3 2023 on a year-on-year basis, with 362 sales across the 12 markets covered in the three months to September compared to 371 in the same period last year.
Residential sales in many of the world's mainstream markets are down by 20% to 30% year-on-year. This weakness is mainly due to the surge in finance costs over the past year, which has had a dramatic impact on affordability and market accessibility.
While not immune from slowing activity, our latest data confirms that global super-prime markets have been more resilient, with sales in our 12 markets falling only 2.4% in Q3 this year against the same period in 2022 - with 362 sales against 371 respectively.
Liam Bailey, Knight Frank's Global Head of Research said, "Super-prime activity has come off the 2021 peak, but our latest results confirm a market still seeing activity above prepandemic levels. Higher debt costs will continue to weigh on the sector - but a lack of fresh new-build project launches in key markets like London and New York will impact on sales in 2024."
Annualized data shows a similar picture with sales in the 12-months to September down by 4.1% compared to the full year 2022 results.
The total value of super-prime sales - at $31.7 billion over the most recent 12-month period has fallen from the 2021 post-pandemic high of $40.7 billion but is still well ahead of the pre-pandemic total of $18.6 billion in 2019, reports Knight Frank.
The super-prime market is driven more than most by new-build completions. Those strong sales volumes in 2021 were flattered to an extent by delayed completions from 2020, and to be fair some of the current strength in Knight Frank's global number, especially in London, New York and Miami have been bolstered by completions in luxury schemes which started pre-pandemic. As we move into 2024 the tailwind from new build sales will weaken as the lower volume of new project starts through the pandemic begins to be felt.
Super-prime markets are inherently international and the recovery in travel volumes through 2023 have helped to support sales - with global flight volumes as one measure - closing in on 2019 levels again.
Five markets saw volumes rise through the last quarter on a year-on-year basis, with Hong Kong, Dubai, Geneva, Miami, and Sydney seeing more sales in Q3 this year against Q3 2022.
Dubai once again leads Knight Frank's ranking of quarterly sales - a position it has held since Q4 2022. London follows in second position, with Hong Kong sitting in third place.