1. RENTS ARE CONTINUING TO OUTPERFORM IN AN UNCERTAIN AND HIGHER INTEREST RATE ENVIRONMENT

Prime rental markets remained resilient in the first half of the year as economic and geopolitical uncertainty encouraged many to prioritise the flexibility that renting provides. Across the 30 cities tracked in the index, average prime rents rose 1.1%, set against prime capital value growth of 0.6%, extending the trend of rental growth outpacing capital values seen since mid- 2022. Elevated interest rates, affordability constraints and deferred purchasing decisions have all sustained demand for prime rental properties.

Over the past two decades, capital values had consistently outperformed rental value growth. However, since the pandemic, as the world experiences more volatility and uncertainty, rents have been outperforming capital value growth.

2. SUPPLY AND DEMAND IMBALANCES ARE DRIVING GLOBAL GROWTH

Supply constraints have defined several of the index’s strongest markets. Tokyo has seen 7% capital value growth over the first half of 2026, the highest increase across the 30 cities monitored. The city continues to benefit from both domestic and international migration, while an acute shortage of available prime residential properties has been supporting pricing.

New construction has been constrained by increasing land, labour, and construction costs; at the same time, demand has remained resilient with global interest reinforcing Tokyo’s strong performance, with annual growth now standing at 20.4%.

Cape Town delivered 4.7% capital value growth as demand continued to outpace limited prime stock, while Seoul recorded 4.1% growth amid ongoing supply and demand imbalances.

3. WEALTH CREATION IS LEADING TO A RESURGENCE OF RESIDENTIAL MARKETS IN SOME LOCATIONS

Nearly two-thirds (60%) of cities recorded stable or positive capital value growth in the first half of 2026. Alongside supply constraints, economic expansion and wealth creation is supporting demand across global prime residential markets.

San Francisco was the strongest-performing market in the Americas, with capital values rising by 4.8% and rents by 3.7% over the first half of 2026. The city is benefiting from renewed momentum in the technology sector, particularly as a global centre for artificial intelligence innovation. The resulting inflow of talent and capital is contributing to a recovery in residential demand.

New York also recorded steady growth, with capital values increasing by 2.4% and rents rising by 2.1%. As the most expensive prime residential market in North America, with prices approaching $2,700 per sq ft, the city continues to benefit from its enduring appeal as a global financial, business and cultural hub.

London remains a top-tier wealth hub for global high net worth individuals driven by its strong lifestyle provisions, though capital values fell by -1.9% over the first six months of the year. In the face of shifting tax regimes in the United Kingdom, the fact that London remains the top destination for lifestyle factors demonstrates the ongoing appeal of the British capital.

4. LIFESTYLE MARKETS CONTINUE TO OUTPERFORM

Southern Europe remains one of the strongest-performing regions globally, supported by lifestyle appeal, international demand and limited prime housing supply. Lisbon led regional performance, recording capital value growth of 3.3% alongside rental growth of 7.6%, demonstrating the ongoing resilience of demand in the market.

Across Spain, constrained supply continues to support rental growth. Madrid and Barcelona recorded capital value growth of 2.4% and 1.5% respectively, while rents increased by 2.1% and 2.0%. Italy also delivered positive results, with Milan and Rome registering capital value growth of 1.5% and 0.2% respectively, alongside rental growth of 2.0% and 1.8% respectively.

Strong lifestyle fundamentals, international connectivity and sustained global appeal continue to support demand across Southern Europe’s key residential markets.

5. OUTLOOK OF RESIDENTIAL RESILIENCE, BUT GROWING DIVERGENCE

As market conditions become increasingly shaped by local dynamics, cities with strong wealth creation, constrained stock and enduring international appeal are likely to see the strongest growth. While geopolitical and economic uncertainty may create more uneven outcomes, the outlook for prime residential markets remains resilient, with relative value, lifestyle appeal and long-term economic fundamentals continuing to differentiate performance.

Supply-constrained and lifestyle-led markets are expected to deliver the strongest performance through the remainder of the year. Cape Town is forecast to lead growth with capital value growth of 4%–5.9%, while Singapore, Seoul, Kuala Lumpur, Lisbon, Madrid and Barcelona are also expected to outperform, supported by limited prime supply and sustained demand.

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