Prime Property Prices Set for Decline in Major Cities: What Savills Predicts for 2025

Prime Residential Property Prices Set to Decline in Major Cities

A recent report by Savills Plc shows prime residential property prices in many top cities may fall in 2025. The report names Hong Kong, London, and San Francisco among the areas at risk. Rising borrowing costs are making investors more cautious.

Declining Sentiment in Global Property Markets

Savills observes that over half of the 30 cities it watches may see little or negative growth in property values next year. Investors feel uneasy because slow interest rate rises and steady inflation shape a tougher market. These forces make buying and building property less attractive.

The study points to slow growth in high-end property values. It predicts prices will rise only 1.6% in 2025, down from 2.2% in 2024. This is the smallest gain seen since 2020, a sign that the market is cooling after years of fast growth.

Key Markets Facing Pressure

Investors in House in Multiple Occupation must note the current figures. In Hong Kong, strict cost rules and higher borrowing rates put pressure on rental returns. London experiences quick shifts from both local and national policies. In San Francisco, tech layoffs and changes in work habits affect the demand for homes.

Property investors need to keep a close watch on these changes. Those in HMO properties must study the market well and know what tenants need in a world where working from home is more common.

Implications for Property Investors

Rising borrowing costs hit both homeowners and investors. High interest rates slow down property deals as buyers pause. Homeowners may also choose to stay in place rather than take on new loans. This change asks investors to plan new strategies in a slower market.

Investors in property must stay alert and ready to act. Those eyeing HMO properties must rely on solid market study and careful reading of tenant needs, especially as remote working grows.

Summary

The Savills report makes clear that the luxury home market in key cities faces a difficult year ahead. With slow growth and potential drops in property values driven by higher borrowing costs, investors must plan well. People interested in HMO investments will find both risks and chances. They must use careful study when planning moves in the real estate market.