The euro is close to parity with the dollar for the first time in 20 years. What does this mean for property markets? The purchasing power of US dollar buyers is likely to strengthen further this year, particularly in Europe.
The dollar has become supercharged in part due to safe-haven flight in response to the crisis in Ukraine but also due to the Federal Reserve hiking interest rates faster than its peers.
Knight Frank agents in Paris, the South of France, Monaco, Switzerland, Italy and Barcelona are reporting stronger US demand.
US buyers accounted for 14% of Knight Frank’s European and Caribbean sales in 2021, despite travel restrictions, up from 9% in 2019 prior to the pandemic. Data from the Spanish Council of Notaries shows US buyers on average spend 30% more than the average overseas buyer.
Prime rents continue to soar in major cities worldwide. The return of office workers, international students and corporate tenants are together bolstering demand leaving rental stock a rare commodity.
The latest data for Manhattan shows luxury rents increased 33% in the year to April reaching a median rental price of $10,000 per month. This was the second highest rate on record, according to our colleague Jonathan Miller, with rental inventory down 77% year-on-year.
London is witnessing a similar trend. Rents in prime central London are 9% above their pre-pandemic level and up 29% in the year to April 2022. The market looks set to remain strong over the summer, but all eyes are on the sales market - as and when it starts to slow, supply in the rental market may start to increase.
With this trend set to continue keep an eye out for our new Prime Global Rental Index which will track the movement in luxury rents across 10 global cities each quarter.