London and New York have been battling it out for the position of the world’s premier property hotspot, according to a new report by Knight Frank – with London just about taking the lead.
The competition between these two cities for this position has always been high; according to Liam Bailey, Knight Frank’s global head of research, “these two cities continue to lead development trends, in terms of design, pricing and iconic architecture”.
In terms of prices, London certainly has the upper hand. On average, property prices in London have risen by 138 percent over the last decade – the strongest increase of any city globally, including Asian cities such as Hong Kong, where prices have risen by 93 percent in the same period.
According to the report, London’s rising population and middle class work force are behind the surge. Londoners employed in finance, insurance, IT and telecoms rose from 1.28 million to 1.56 million between 2009 and 2014, outstripping the 1.1 million employed in the same sectors in New York and 0.8 million in Hong Kong.
However, it also highlighted a subject of much debate: London is struggling to meet housing requirements. Although official forecasts point to a requirement for 50,000 new housing units each year for the coming decade, the current delivery stands at just 30,000 units. Of those that are being built, many are designed to attract high-net work buyers from around the globe. According to Ian Marris, head of Knight Frank’s London Residential Development Team, “the global high-net-worthproperty buyer has never been more discerning or educated – or had more choice.”
The report lists several of London’s ‘developments of influence’, completing in the next few years. One of these is the area just north of Kings Cross, which is being developed by the Kings Cross Central Limited Partnership and is due for completion in 2020. A mixture of retail, office, luxury and affordable housing space, this development captures London’s ability to transform empty areas into prime property hotspots.
However, surprisingly, there may be a new city vying for the top spot: according to the Knight Frank, Miami is the one to look out for. Plagued by depression and repossession after the financial crisis, the property market is recovering again and prices have jumped 91 percent in the last five years – an impressive increase in such a short space of time. If Knight Frank are correct, both London and New York may have to watch their backs.
Miranda Wadham on 08/10/2015