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Cape Town features favourably in World Cities Prime Residential Index

Dr Andrew Golding, chief executive of the Pam Golding Property group

Prime residential markets across the globe have continued to demonstrate resilience in the face of economic and geopolitical uncertainty, with rental values outpacing capital growth in the first half of 2025, according to Savills World Cities Prime Residential Index.

While capital values rose by a modest 0.7% across the 30 cities monitored in the index, prime residential rents increased by 2%, reflecting a growing investor preference for income-generating assets and a shift in tenant behaviour amid ongoing market volatility.

“Despite a slowdown from the 2.2% growth recorded in 2024, capital values remained in positive territory, with 60% of cities posting gains in the first half of the year,” comments Kelcie Sellers, associate director, Savills World Research. “Most markets with price falls only saw slight declines. Cities with negative price growth were primarily the larger cities where residential property can be more costly to obtain, such as London, Paris, Shanghai and Los Angeles.”

Tokyo leads the Index with 8.8% growth in H1 2025, driven by a chronic shortage of new stock and resilient demand from both domestic and international buyers. Capital values are forecast to rise by a further 6% to 7.9% over the second half of the year.

Berlin, Dubai, and Seoul each posted growth above 5%, supported by constrained development pipelines and strong buyer sentiment.

Lifestyle appeal of Cape Town attracts buyers

Says Dr Andrew Golding, chief executive of the Pam Golding Property group, which is Savills’ exclusive residential real estate partner in Africa: “The Savills Index notes that cities with strong lifestyle appeal, such as Amsterdam, Cape Town, Lisbon, and Sydney, saw positive growth, buoyed by low levels of prime stock and sustained international interest. The lifestyle-driven nature of these markets continues to attract buyers, many of whom are less sensitive to short-term economic fluctuations. This sustained level of demand is likely to support further price growth.”

Looking ahead, Savills forecasts average capital value growth of 1.5% across the Index in H2 2025, with Cape Town, Seoul and Tokyo expected to lead the way with anticipated growth of 6% to 7.9%.

Savills World Cities Prime Residential Index – capital value growth by city H1 2025

City Capital value growth – H1 2025 Capital value forecast – H2 2025 Prime capital value June 2025 (US$ psf) Prime capital value June 2025 (€ psm)
Tokyo 8.8% +6% to 7.9% $2,330 €22,900
Berlin 7.2% 0.0% $1,200 €11,800
Dubai 5.7% +4% to 5.9% $980 €9,600
Seoul 5.1% +6% to 7.9% $1,950 €19,300
Amsterdam 3.6% +2% to 3.9% $1,070 €10,500
Cape Town 3.2% +6% to 7.9% $260 €2,600
Geneva 2.7% 0.0% $2,460 €24,300
Lisbon 2.4% +4% to 5.9% $1,440 €14,200
Sydney 1.8% +4% to 5.9% $2,000 €19,700
New York 1.2% -1.9% to 0% $2,610 €25,800
Madrid 0.9% +2% to 3.9% $1,120 €11,100
Athens 0.8% 0% to 1.9% $1,190 €11,700
Kuala Lumpur 0.6% 0% to 1.9% $240 €2,400
Barcelona 0.5% +2% to 3.9% $940 €9,300
Rome 0.5% 0% to 1.9% $1,460 €14,400
Mumbai 0.4% +2% to 3.9% $1,200 €11,900
Singapore 0.2% 0% to 1.9% $1,810 €17,800
Milan 0.0% 0% to 1.9% $1,520 €15,000
Beijing -0.5% 0.0% $1,490 €14,700
San Francisco -0.6% -1.9% to 0% $1,400 €13,800
Paris -0.7% 0.0% $1,860 €18,300
Hangzhou -0.7% 0% to 1.9% $1,200 €11,800
Shanghai -1.5% 0% to 1.9% $1,980 €19,500
London -1.6% -3.9% to -2% $1,900 €18,800
Shenzhen -1.7% -1.9% to 0% $1,440 €14,200
Bangkok -2.3% 0% to 1.9% $1,050 €10,400
Miami -3.0% -1.9% to 0% $1,440 €14,200
Los Angeles -3.1% -1.9% to 0% $1,430 €14,100
Hong Kong -3.5% 0.0% $3,720 €36,700
Guangzhou -4.3% -3.9% to -2% $1,420 €14,000

Source: Savills Research

Prime residential rents across the 30 global markets have proven even more resilient, with 23 out of the 30 cities in the Savills index recording rental growth in H1 2025, reflecting the continued global demand for top-tier rentals in key destinations.

Prime residential rental growth by city in H1 2025

Source: Savills Research

Tokyo again leads the charge. Driven by limited supply and strong demand, prime residential rents in the city increased by 7.8% in the first six months of the year and by 13.5% year-on-year.

Cape Town saw strong rental growth of 6.5%, again driven by a shortage of prime rental properties and high demand, as well as stability in the market following elections in 2024.

In Europe, while rental growth is slightly more muted than in other regions, there is still an overarching trend towards price stabilisation. The highest rental price increases were seen in Berlin (6.3%), Amsterdam (2.6%), Rome (1.4%) and Lisbon (1.3%).

Almost all markets that experienced declines during the first half of the year are located in China, with six-month growth ranging from -0.2% in Beijing to -1.8% in Guangzhou. Falls come amid weak demand and high supply.

“For the remainder of 2025, we expect rental growth of, on average, 1% across the 30 cities we monitor, reflecting a general sense of cautious positivity,” comments Kelcie Sellers.

Posted by The Know - Pam Golding Properties

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