Kuala Lumpur drops in Global Cities Index as top-tier residential prices cool

Kuala Lumpur has dropped to number 32 in the latest Prime Global Cities Index, which tracks prime residential prices across global cities worldwide.

The index, released by independent global property consultancy Knight Frank, increased by 4.4% in the year to June 2016, its highest rate of growth over the last two years.

As of June 2016, Kuala Lumpur saw prices of top-tier mainstream residential property decline 2.2 percent year-on-year.

Vancouver, Canada leads the rankings for a fifth consecutive quarter, with prime prices up 36.4% in the year to June. However, July saw the the British Colombia Government announcing plans to introduce a new 15% tax for foreign buyers.

Most of the top ten ranking cities were also on the receiving end of new cooling measures in the last 12 months.

“The latest move by policy makers in Vancouver to apply an additional tax for foreign buyers has mirrored some of the similar moves over the last few years in Asia-Pacific. Hong Kong and Singapore, most notably, have added 15% additional buyers stamp duties, while the Australian states of Victoria, Queensland and New South Wales have also recently introduced various additional levies for foreign buyers,” Knight Frank’s Asia Pacific Head of Research, Nicholas Holt said.

“Conversely, liberalisation is the flip side of protectionism; whilst we have seen foreign buyers penalised in certain markets, in Vietnam and Indonesia for example, we have seen policy makers go the other way with recent moves to relax rules for non-nationals,” Holt added.

Other top performers include Shanghai (22.5%), Cape Town (16.1%), Toronto (12.6%), Melbourne (11.0%) and Sydney (10.2%) which all saw annual price growth reach double figures in the year to June.