Cape Town leads luxury residential rental growth while London falls to the bottom of the ranking

 
Shruti Tripathi Chopra
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House Prices Widen The North-South Divide
Prime residential rents in London are falling (Source: Getty)

Cape Town has enjoyed the biggest rise in annual rents for luxury homes in the world, according to Knight Frank.

The South African city has seen prime residential rents rise by 5.9 per cent annually followed by Zurich (5.1 per cent) and Guangzhou (four per cent).

The number of cities where prime rents have increased on an annual basis rose from six in the first quarter of 2016 to 12 in the same period this year, Knight Frank said.

The index, which tracks luxury residential rents across 17 cities globally, found that prime rents in London continue to bottom out with the annual rate of falls slowing to minus 4.9 per cent to March 2017.

Knight Frank blamed a series of tax hikes, which led to an increased supply of properties for rent, for the slow rental growth in the capital.

Read more: The London areas where property prices have increased the most since 2009

Between January and May 2017, the number of new rental properties coming to the market in prime central London dropped six per cent compared to last year.

Knight Frank said: "Relatively high stock levels [in London] have been a feature of the market since early 2015, as increased sales taxes and short-term uncertainty over pricing in the sales market prompted many would-be vendors to become landlords."

Read more: Check out the London areas where property sales fell the most in 2016

Ranked: Rental growth in global cities

Rank City 12-month percentage change
1 Cape Town 5.9 per cent
2 Zurich 5.1 per cent
3 Guangzhou 4 per cent
4 Toronto 2.4 per cent
5 Moscow 2.1 per cent
6 Beijing 2 per cent
7 Tel Aviv 1.7 per cent
8 Tokyo 1.6 per cent
9 Vienna 0.8 per cent
10 Hong Kong 0.6 per cent
11 Shanghai 0.1 per cent
12 Taipei 0 per cent
13 New York -1.2 per cent
14 Singapore -2.3 per cent
15 Geneva -4.6 per cent
16 London -4.9 per cent
17 Nairobi -6.2 per cent

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