According to the London-based Knight Frank's Prime Global Rental Index, rental prices in residential markets around the world increased in the third quarter of 2011.
The 4.3 percent increase is the highest annual performance for the index since the third quarter of 2008. The overall index is now 19% higher than its pre-recession low in Q1 2010, but it is still 18% lower than its pre-recession peak in Q3 2008. properties qatar
The Knight Frank Prime Global Rental Index rose by 4.3 percent in the year leading up to September.
In the third quarter of 2011, rents fell in just three of the cities monitored by the index, with an average rental rise of 0.4 percent.
Geneva has proven to be the most effective. Rents have risen by 18 percent in the last year.
Rents in Cape Town have decreased by almost 15% in the last year.
The Middle East has the worst economic performance of any region on the planet. Rents have fallen by 5.3 percent on average in the last year.
In the three months leading up to September, the index only increased by 0.4 percent, compared to its strong annual rise. This could herald the start of a new cycle of slower growth, owing in part to the global economy's deterioration. When Cape Town is removed from the index, however, quarterly growth is a respectable 1.6 percent, demonstrating that sovereign debt issues and the global economy's volatility haven't dampened tenant demand or investor sentiment.
There are major regional and city-based disparities in rental results; Geneva, the highest-ranked city, is 33 percentage points apart from Cape Town, the lowest-ranked city. Corporate relocation budgets in Cape Town have been sharply cut, and the top end of the South African rental market is dominated by corporate tenants. Unlike previous quarters, there is no homogeneity on a continent-by-continent basis.
In Africa, Nairobi and Cape Town are at opposite ends of the rankings, as are Geneva and Moscow in Europe. The productivity of each city is determined by a diverse set of variables, including local supply-and-demand dynamics, economic growth, and, most significantly, work conditions in the prime rental sector.
Geneva's good performance can be attributed to the Swiss economy's resilience, which has weathered the economic storm better than other European countries. It has remained untouched by the global debt crisis, enhancing its image as a safe haven.
The weak pound has benefited the prime rental market in London, attracting a large number of international buyers and tenants. Foreign tenants from 61 countries leased 59 percent of Knight Frank's London properties in 2011.
Asia is a mixed bag, with Hong Kong and Singapore developing more slowly than the rest of the continent. In the last year, annual rental growth in Hong Kong has shifted from 18.1 percent to 10.6 percent, while it has shifted from 17 percent to 4.8 percent in Singapore. In China's major cities of Beijing and Shanghai, on the other hand, the pace of rental growth is rising, though it remains to be seen if government-imposed regulatory measures that are softening prices would also soften rents.