Cape Town is tipped to overtake Tokyo as the strongest-performing city for prime residential property growth, according to new Savills data seen exclusively by Spear’s ahead of its release.
Luxury property values in Cape Town rose 4.7 per cent in the first half of the year and are forecast to climb by a further 4 to 5.9 per cent in the second half, according to Savills’ latest half-yearly ranking of global prime property.
Tokyo, which wowed the prime property market last year with capital value growth of 30 per cent, remained the strongest performer in the first half of 2026, with its prime capital values rising by 7 per cent. However, Savills does not expect any further growth there in the second half of the year.
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The falling yen, international buyer and investor interest, growing domestic demand, and low supply drove the boom, the property firm said. Kelcie Sellers, associate director of world research, told Spear’s that Tokyo’s recent outstanding performance is an ‘anomaly’ in historical terms.
Meanwhile, Cape Town’s relatively weak rand is making prime property particularly attractive to wealthy dollar buyers. Along with lifestyle benefits including a Mediterranean climate, proximity to world class wine regions and well-regarded private schools, the South African city is also one of the less expensive markets for prime property, with values at around $300 per square foot, compared with $3,140 in Tokyo, $2,700 in New York and $1,960 in London.
UHNW buyers ‘voting with their feet’
Across all 30 cities in the index, luxury property values grew by just 0.6 per cent on average in the first half of the year, with 60 per cent of the cities experiencing growth. Prime rents rose 1.1 per cent in the first half of the year, up from 0.5 per cent growth in the second half of 2025.
Prime rents have now outpaced capital values for around four years. Economic and global uncertainty, as well as affordability constraints, have led some prime buyers to favour the flexibility of renting over ownership, Savills said.
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‘People are much more agile than they used to be, and more global,’ says Victoria Garrett, Savills head of global residential outside the UK. ‘They can ask “Am I comfortable spending that money to live in this jurisdiction? Does it make sense financially?”’
‘These people are financially astute and they have the power to vote with their feet. And that’s what we’re seeing people do.’
Some wealthy buyers are not bound by a sell-to-buy model, instead keeping desirable luxury homes across multiple jurisdictions and moving between them, Garrett explains. This helps to sustain demand for top-tier residences, even amid wider economic uncertainties.
Prime property faces tough second half
Elsewhere, in what Savills decribes as ‘supply-constrained and lifestyle-led markets’, Seoul’s prime residential market remained strong in the first half of 2026 with a capital value rise of 4.1 per cent and rents up 4.4 per cent. Savills has forecast it will record growth of 2 to 3.9 per cent in the second half of the year. The same 2 to 3.9 per cent growth is expected for Singapore, Kuala Lumpur, Lisbon, Madrid and Barcelona in the second half of the year.
The forecast for London’s prime property market is not as rosy, with capital values expected to fall by up to 1.9 per cent in the second half of the year, after declining 1.9 per cent in the first half. The look-ahead for Sydney suggests a drop of 2 to 3.9 per cent.
Dubai has the weakest outlook in the index, with capital values forecast to fall by around 10 per cent in the second half of the year. Oversupply and geopolitical uncertainty led prime capital values to drop 4.5 per cent in the first half of the year, with rents down 6.7 per cent.
Average prime residential capital values are expected to rise by 0.5 per cent across the 30 cities in the second half of the year, with Savills pointing to supply, wealth creation and international demand as key factors shaping which markets will flourish or flatten.
