Tokyo leads the Savills World Cities Prime Residential 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. (See Table 1)

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

Cities with strong lifestyle appeal, such as Amsterdam, Cape Town, Lisbon, and Sydney also 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.

Hong Kong continues to face headwinds, with capital values falling by 3.5% in H1 2025. With elevated pricing and ongoing policy uncertainty, it has experienced a more subdued performance. Despite this decline, the city remains the most expensive in the World Cities Index, with average prime prices of US$3,720 per square foot (€36,700 per square metre).

Meanwhile, China’s series of policy measures introduced since late 2024 have been particularly effective in the prime segment, where new launches have seen strong uptake and, in some cases, oversubscription.

However, broader market demand remains subdued, and overall transaction volumes have declined.

“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 residential property can be more costly to obtain, such as London, Paris, Shanghai and Los Angeles.”

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%.

Although Singapore’s capital value is projected to rise by 1.5% in the second half of 2025, nevertheless, the city-state stands out for its exceptionally high entry costs: a 60% Additional Buyer’s Stamp Duty (ABSD) for international buyers making it the most expensive globally in terms of transaction costs – nearly three times higher than Barcelona, the next costliest city, and well above the global average of 15% and the Asian average of 9.2% (excluding Singapore). (See Chart 1)

Alan Cheong, Executive Director, Research & Consultancy, Savills Singapore says, “Singapore’s private residential market will be driven by locals and permanent residents. The weight of money from the baby boomer generation and higher public flat resale prices is expected to continue to drive demand in the private market.”

Broadly across the global markets, the largest change seen over the past five years has been in the rising tax costs imposed on buyers of prime residential properties. Governments across the world have been gradually increasing stamp duties and transaction taxes on foreign buyers to raise revenue and tackle rising housing unaffordability.

In the United States, the cost of holding is also significantly higher due largely to substantial annual property taxes, totalling, on average, 6.3% of the purchase price over five years. Markets across mainland China remain the most affordable to buy, hold and sell across the index, with an average total cost of 4.3% of the purchase price.

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.

Prime residential rents in 23 of the 30 cities in the index recorded rental growth in H1 2025, reflecting the continued global demand for top-tier rentals in key destinations. (See Chart 2)

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.

Almost all markets that saw declines during the first half of the year can be found 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.

Read the report.