London rises dramatically above New York, Hong Kong, in global prime property league

Global prime property – The scale of London’s property bubble is laid bare in a report that reveals how the capital has dramatically outstripped New York and every other major city in the world on prices and sales over the past five years.

In 2009, there were 2,147 sales of luxury houses and apartments in London in the $2m to $5m bracket, which put the city behind Hong Kong and roughly on a par with New York. But by 2014, sales in that price bracket in London had ballooned to 6,250 – double the number in Manhattan and triple the number in Hong Kong, Singapore and Sydney.

In the ultra-prime market – properties selling above $5m – the rich residents of Manhattan are now the poor cousins to Londoners. According to upmarket estate agency Knight Frank, which compiled the figures, there were 1,638 properties sold in London for more than $5m (around £3m) in 2014, compared with 796 in Manhattan, 258 in Sydney and just 21 in Los Angeles.

Knight Frank said London and New York constantly jostle for position as the world’s premier property market, with London currently ranked as the leading city for the global wealthy. “These two cities continue to lead development trends, in terms of design, pricing and iconic architecture,” said the head of research, Liam Bailey. He added that he expected London’s dominance to remain in place for the next decade, although New York could supplant it by 2024.

Prices for prime London property have risen faster than any major city in the last decade, including those in east Asia. The typical Mayfair or Holland Park apartment in central-west London has jumped in price by 138% since 2004, said Knight Frank, whereas in second-placed Hong Kong, prices for prime property have risen 93%. New York was next, with gains of 78%, followed by Singapore with 69%.

The rise in London prices comes despite a relatively high supply of newly built luxury apartments in the city compared with overseas rivals. Residential completions in Hong Kong and New York in 2014 were lower than in London, which is experiencing a tower-building boom. London’s traditionally low-rise skyline is being swiftly replaced by luxury residential skyscrapers, with 263 tall buildings of more than 20 storeys proposed, approved or under construction in Greater London.

But in the global property race, New York is fighting back. Knight Frank is predicting a surge in the city’s residential supply, epitomised by 432 Park Avenue.