Cape Town outperforms New York and London for luxury property rental growth
Despite indications that Cape Town’s property sector is cooling off, the luxury property market shows no signs of slowing, including rentals.
Knight Frank’s Prime Global Rental Index, which tracks luxury residential rents across 17 cities globally, recorded annual growth of 0.5% in the year to March 2017.
The number of cities where prime rents have increased on an annual basis rose from six in the first quarter of 2016 to 12 in the first quarter of 2017.
“Yet the general trend has been for steady, rather than spectacular growth,” the property group said.
Cape Town leads the rankings with rents rising by 5.9% in the year to Q1 2017. “Growth has been underpinned by strong migration into Cape Town with potential buyers choosing to rent before committing to purchasing,” Knight Frank said.
Prime rents in London continue to bottom out with the annual rate of falls slowing to -4.9% to March 2017. Uncertainty in the sales market following a series of tax hikes has led to an increased supply of properties for rent. However, this trend is starting to ease as the sales market stabilises, Knight Frank said.
Some of the world’s top financial centres have shown divergence in terms of the performance of prime rents. Annual rental values fell in New York (1.2%) and Singapore (2.3%) whereas Zurich and Hong Kong recorded a rise year-on-year of 5.1% and 0.6% respectively over the year to March 2017.
Read: These are the top 10 most expensive suburbs to rent property in South Africa
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