Prime residential property prices in Riyadh held firm in 2016, according to Knight Frank's unique Prime International Residential Index (PIRI 100). This metric forms part of Knight Frank's latest Wealth Report (2017) and tracks the value of luxury homes in 100 locations worldwide. The news is set amidst a general backdrop of marginal declines in two other GCC cities in the same premium market category, together with larger drops in the United Kingdom. Stefan Burch, General Manager, Knight Frank, KSA, said "in the Kingdom, the supply of luxury residential real estate remains restricted to several key schemes in Riyadh and Jeddah. Coupled with low levels of current supply, developers have faced headwinds throughout 2016 as the country undergoes wide- ranging reforms which has further constrained supply and the delivery of new stock. As a result, the market for top end residential units has remained robust year–on-year with prices holding firm throughout 2016. We expect the current dynamics to persist through 2017 with an uptick in capital values in 2018." Currently prices in Riyadh for luxury residential schemes stand at SR17,000 per square meter while along the Jeddah Corniche rates stand at SR20,000. This makes it one of the more affordable cities in the world to purchase prime real estate, with $1 million buying approximately 188 square meters, in contrast to Dubai, where $1 million will yield 162 square meters of accommodation. This news is set against a less positive picture in wider GCC markets, with Doha and Abu Dhabi experiencing a weakening in the market of up to 2%. Dana Salbak, Head of MENA Research Knight Frank, said: "Within the region, lower oil prices and global economic uncertainties impacted investor sentiment resulting in a slowdown in the overall level of transactions. Meanwhile the strengthening of the US dollar impacted the purchasing power of investors from non-USD pegged currencies." Closer analysis of the PIRI 100 highlights some significant regional variations. Chinese cities outpaced other markets by some margin: Shanghai (27.4%), Beijing (26.7%) & Guangzhou (26.6%). However, new cooling measures, including higher deposit rates and home purchase restrictions, have already been introduced and are having their desired effect of slowing the rate of growth. Australasia was the strongest-performing world region in 2016 with prices rising by 11.4% year-on-year. Toronto marginally eclipsed Vancouver to take the title of North America's strongest performer in 2016 with prices rising 15.1% year-on-year. In New York, the strength of the US dollar negated some overseas interest and the delivery of selected luxury projects helped inflate supply but luxury prices proved resilient rising 3.5% year-on-year. Amsterdam is Europe's strongest-performing city with prices increasing 10.1% in 2016. The Alpine resort of Gstaad is this year's top-performing ski resort. Prices here rose 10.0% due to limited supply as the cap on second homes filtered through into the market. Prices in prime central London market slipped 6.3% in 2016 as changes to stamp duty in recent years weakened demand but the final quarter saw activity strengthen as buyers adjusted to the new tax burden. Latin America is one of four world regions which recorded negative growth in 2016. Prices slipped by 2.7% year-on-year. Knight Frank's PIRI examines how much $1 million can buy in 10 key cities around the world. Monaco for the tenth consecutive year is confirmed as the most expensive city to buy luxury residential property. Here, $1 million buys just 17 square meters of accommodation. This year, New York knocks London out of third place with US$1m buying 26 square meters of prime property compared to London where the same amount can now buy you 30 square meters. Meanwhile in Dubai, $1 million buys 162 square meters of accommodation, making it one of the affordable cities to buy luxury residential property.
