The 9 fastest-growing luxury housing markets in the world

Photo: iStock

Knight Frank has released its Prime Global Cities Index for the third quarter of 2016.
It shows that, despite an average 3.8% annual growth rate across the 37 cities it tracks, the increase in prime property values slid compared with the last quarter in many cities.

Prime property refers to top 5% of the wider market in each city.

That is due to a variety of factors, including extra property taxes, general elections, and moves to close down tax loopholes for foreign buyers.

Take a look at the cities that made the top of the list, ranked by 12-month percentage growth in prime property values:

9. Sydney, Australia

iStock

12-month increase: 8.1%

3-month increase: 1.0%

The luxury housing market in Australia's most populous city is buoyed by a limited supply.

Knight Frank say that its slow 3-month growth rate is due to new property taxes in the city. New South Wales, the state which includes Sydney, introduced an extra 4% stamp duty for foreign buyers in June.

8. Cape Town, South Africa

12-month increase: 8.5%

3-month increase: 0%

Cape Town's coastline and mountains mean that the city -- which is highly popular with affluent young workers -- has a very limited capacity to expand, pushing up demand for housing.

7. Tokyo, Japan

12-month increase: 9.2%

3-month increase: 3.8%

A Bloomberg report into Tokyo's booming property market concluded that the weakening Japanese yen and the comparative cheapness of Tokyo homes against other major international cities has driven investment into the city, both from within Japan and from abroad.

6. Melbourne, Australia

12-month increase: 10.2%

3-month increase: 2.9%

Wealthy expats, mainly from China, drive demand at the top end of the Australian city's housing market.

5. Toronto, Canada

Taxiarchos228 / Wikimedia Commons

12-month increase: 12.0%

3-month increase: 1.2%

Foreign investment and a relatively low Canadian dollar have been blamed on soaring house prices in Canada's major cities in recent years.

In August, Canada introduced a controversial 15% levy on foreign purchases of homes to tackle the problem, and it seems to have worked. The 3-month regional change in Toronto was just +1.2%, compared to a 12-month change of +31.6%.

4. Guangzhou, China

12-month increase: 14.3%

3-month increase: 6.9%

Luxury house prices in China's third largest city grew by 6.9% on last quarter. It is China's busiest transport and trade hub.

3. Seoul, South Korea

iStock

12-month increase: 17.5%

3-month increase: 8.2%

House prices have been rocketing in the South Korean capital since the 1970s, when the government transformed rice paddies to the city's south into South Korea's first modern residential district. They rose by 8.2% in the last quarter, the biggest increase of any city on our list.

2. Shanghai, China

12-month increase: 23.4%

3-month increase: 3.5%

The resident population of eastern China's largest city has swelled from 13 million people in 1995 to 24 million people in 2015, pushing up demand for housing. The market is also buoyed by an influx of high-skilled workers coming to China's biggest cities in recent years.

1. Vancouver, Canada

12-month increase: 31.6%

3-month increase: 1.5%

The city, which has a population of 603,000, is highly popular with Chinese investors. The same 15% levy that has slowed growth in Toronto's regional prime market has had an impact in Vancouver, too, with prices growing just by 1.5% on last quarter.

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