The looming threat of a global trade war, uncertainty around Brexit and International Monetary Fund's (IMF's) projection of slowdown for 70 per cent of the world's economies has led to luxury residential prices register the lowest annual growth since the first quarter (Q1) of 2009.
According to data released by international property consultant Knight Frank as part of its Prime Global Cities Index for Q1 of calendar year 2019, rise in prime property prices across 45 cities, globally, has slowed down from 4.3 per cent two years ago to 1.3 per cent at present.
Among Indian cities, Delhi, which secured a top 10 spot at the 7th position, saw prime property prices grow 5.8 per cent over a period of 12 months. The national capital was followed by Bengaluru at the 20th position, where prices registered a 2 per cent growth. On a 3-month basis, Delhi's prime property prices grew 4.4 per cent, while Bengaluru's saw a 0.8 per cent growth.
Ranked 31st, Mumbai registered a dismal growth of 0.6 per cent over 12 months and 0.3 per cent over 3 months, indicating a possible shift of momentum to the affordable & mid-segment housing category.
According to Shishir Baijal, Chairman & Managing Director, Knight Frank India, the Indian residential property market has been stagnant for a while now with sales velocity, especially of prime properties, remaining slow and leading to an inventory overhang across major markets.
"Further, developers have also shifted their focus to higher traction segments of the market such as affordable and mid-range segments due to the concentrated demand and the conducive environment created for these segments on the back of policy reforms and sops. However, a growth in the prime property market across key Indian cities should be viewed as a positive sign and, going forward, we must track its progress for the next couple of quarters to ascertain if the sector is moving towards a recovery," said Baijal.
Meanwhile, globally, European cities continued to outperform with seven of the top 10 rankings in Q1 of 2019. Of these, Berlin saw a 14 per cent rise, followed by Frankfurt at 10 per cent, Edinburgh at 8 per cent and Paris at 8 per cent. Russia and the Commonwealth of Independent States (CIS) countries came across as the strongest performing world region in Q1 of 2019.