The Wealth Report 2012 shows that property prices in the fleshpots of Southern Europe and the Alps are suffering.
One of the interesting things to come out of the new Knight Frank/Citi Private Bank Wealth Report 2012 – apart from all the interesting things reported by Sophie – is the list of prime international residential hotspots and how they're faring.
There are some unexpected risers: luxury houses in Nairobi are up 25 per cent, the biggest grower, the Kenyan Coast 20 per cent, Bali and Jakarta around 15 per cent.
But the losers – or at least those without growth – are a more interesting bunch: the traditional fleshpots of Southern Europe and the Alps. Mougins, Dordogne, Mallorca, Milan and Monaco (Monaco!) are all down 10 per cent. Also down were Tuscany, Cap Ferrat, St Tropez, Provence, Florence, Umbria, Lake Como, the Western Algarve and Cannes.
Unchanged were ski resorts from Val d'Isere and Courchevel 1850 to St Moritz and Gstaad. Also unchanged were Sardinia, Cyprus and Marbella.
The first thing to note is that volumes in these places at the top end are generally small, so a couple of big sales can shift the average value significantly.
The second thing is that the Wealth Report 2012 shows their prices are still high: Monaco is the most expensive in the world per square metre ($58,300), then Cap Ferrat ($51,800); Courchevel 1850 is $44,000 and St Moritz $42,600. Perhaps we are seeing an overdue correction.
But the most important point is that the eurozone crisis appears to have made property sales grind to a halt or fetch more competitive prices, while the Asian wealthy are discovering the tropical paradises of their neighbourhood. It is not necessarily that the European wealthy are poorer, but that the global wealthy are being put off.
Is this only because of the eurozone crisis – or is this a secular trend reflecting the fall of Europe? Given the concentration of the wealthy in these areas and their sub-baked/snow-ridden attractions, I'd say the former – which is not to say that rocketing Asian growth won't continue to send its luxury property prices sky-high.