Key takeaways
- 31 of the 34 cities that experienced price gains in the Knight Frank Prime Global Cities Index are located outside of the United States
- Domestic markets for property investment are relatively affordable—median listings in Huntsville, Birmingham, and Montgomery are priced below $350,000
- Global hotspots like Singapore, Perth, or Dubai are expensive, but properties appreciate rapidly—10% to 20% annually is not unheard of
After two years of volatility and monetary tightening worldwide, the global real estate market finally appears to be resuming its uptrend in 2024. The Knight Frank Prime Global Cities Index, which monitors 44 key markets in 26 countries worldwide, reported that global home prices increased at an annualized rate of 4.1% in the first quarter of 2024—the highest since Q3 2022.
Quarterly price growth has also gained momentum, with a 1.1% increase in Q1 2024 and a 0.3% rise in Q4 2023. This resurgence is particularly noteworthy given that 78% of the markets in the index are experiencing growth. By contrast, only 10 global cities—a combined 19% of the index—registered price declines.
Will these price gains persist? Although little is for certain, home prices increased in the lion’s share of global markets despite broadly rising interest rates—in nearly all nations except China and Latin America—which is an encouraging sign.
Perhaps the most notable fact? Only 5 of the 44 tracked cities in the Prime Global Cities Index and 3 of the 34 towns experiencing price increases are in the United States. Suffice it to say that plenty of high-growth markets are located on foreign shores. Here are a few domestic and international standouts.
Global Real Estate Investors Hotspots: The U.S. Sunbelt
Driven by burgeoning business growth and an influx of residents, select U.S. cities—particularly in the southern Sunbelt states—are emerging as highly sought-after destinations for global property investment. In 2023, the South accounted for 87% of total U.S. population growth, with over 700,000 new residents relocating to the region through domestic migration—largely for economic reasons.
Lower income and property tax rates, greater affordability and job prospects, and an abundance of business-friendly policies—not to mention tamer weather—make southern cities increasingly attractive compared to costlier and colder northern population centers.
Huntsville Property Market
Huntsville, Alabama, is the state’s largest city by population and also the fastest-growing. Last year, 3,435 residents moved into the city, nearly 10 people daily.
The city’s robust economy is powered by its aerospace, defense, and technology sectors. Significant employers include the U.S. Army’s Redstone Arsenal, which employs 46,000 people, Huntsville Hospital, home to 11,000 employees, and NASA’s Marshall Space Flight Center, which boasts 7,000 employees. Cummings Research Park—host to over 300 companies, 26,500 employees, and 13,258 students—also helps to buoy rental demand.
In 2022, Huntsville’s real GDP grew by 3.7% to $33.5 billion—14% of Alabama’s total GDP. Better yet, the University of Alabama’s Center for Business and Economic Research (CBER) projects that the city’s GDP and employment will grow by 3.8% and 2.9% in 2024.
Still, Huntsville’s homes are affordable. The median listing price for a residential property is $377,900, and at $172 per square foot, homes are 25% cheaper than the national median of $230 per square foot.
Rent growth is equally strong: median rents for a three-bedroom home increased by 6% on a year-over-year basis in May 2024. Over the past decade, properties in Huntsville have appreciated at an annualized rate of 6.9% (and cumulatively by 94.96%). Both figures point to healthy and sustained total returns for global investors.
Birmingham Property Market
Once solely known as a manufacturing city in the South, Birmingham has evolved into a thriving economic hub with highly ranked educational institutions, cutting-edge research facilities, and a stellar healthcare system. It’s now Alabama’s second-most populous city, host to major universities like the University of Alabama at Birmingham (UAB), Samford University, and the Birmingham-Southern College.
Job growth is similarly robust. Last year, the Birmingham area’s employment growth rate ranked fifth in the nation, thanks to an addition of 16,000 new jobs between 2022 and 2023. This growth is supported by large employers such as UAB, which has nearly 30,000 people on its payroll, Walmart, which employs 7,600, Mercedes-Benz, with 6,300 employees, and Regions Financial Corporation, with roughly 6,000 employees.
Birmingham’s GDP grew by 1.5% to $66.2 billion in 2022. Major capital projects, like Southern Research’s $84 million Biotech Center and the $120 million Cooper Green Mercy Health Building—which will come online in 2024 and 2025, respectively—will serve as tailwinds for continued growth. In 2024, the city’s real GDP is expected to increase by 3.9%.
Despite these favorable economic prospects, homes in Birmingham remain relatively cheap—the median home lists for just $189,900, or $123 per square foot. The cost of living is also fairly low: housing is 22% cheaper than the national average, while groceries are priced roughly 8% below the nationwide mean.
That said, rents have steadily risen—a boon for property investors. Over the past year, rents for a three-bedroom home grew by 4%. Meanwhile, property values in Birmingham have appreciated by nearly 81% in the last 10 years—an annualized rate of 6.1%.
Montgomery Property Market
Home to just shy of 200,000 residents, Montgomery is the Yellowhammer state’s third-largest city and capital. The public sector has a large presence in the city, and Montgomery hosts over 10,000 state and local government employees.
The U.S. military also has an outsized presence in the area. Maxwell-Gunter Air Force Base, a 4,029-acre military installation, supports more than 17,000 personnel and over 34,000 students annually—many use off-base housing allowances to rent in nearby neighborhoods.
Montgomery’s real GDP topped $18.8 billion in 2022, a 2.5% increase from the prior year. Upcoming projects like Hyundai’s $290 million assembly plant makeover and Meta’s new $800 million center could position the city for further economic growth, forecast at 1.4% for 2024.
Apart from its strong local economy, the city’s affordability is also a key selling point. The median Montgomery home costs $215,000—less than half the national median of $442,450. This modest entry barrier—with rising rent prices and annualized appreciation of about 4% over the past decade—makes Alabama’s capital city an attractive market for real estate investors.
Global property investment opportunities: Asia, Oceania, and the Middle East
Asia: Singapore, Singapore
One of Southeast Asia’s wealthiest and most powerful countries, Singapore’s powerhouse economy is bolstered by its rapidly expanding finance, trade, and electronics manufacturing industries. The island nation’s GDP expanded by 2.7% yearly in Q1 2024 and is projected to notch 1% to 3% growth for the full year.
In sharp contrast to its massive economy is the country’s physical size. At just 275 square miles, Singapore is tiny—barely half the size of New York City. Still, Singapore’s population grew by roughly 5% in the twelve months preceding June 2023 and is now home to nearly 6 million inhabitants. The nation’s favorable tax regime—which exempts residential properties from capital gains tax—makes its real estate market especially profitable. The city-state’s scarcity of undeveloped land, in combination with its residents’ ever-increasing appetite for housing, makes its real estate some of the most expensive in the world. In 2024, the median listing price in Singapore hit $1.32 million, which puts the value of the city’s real estate roughly on par with San Francisco’s.
Even so, there may be room for further growth. Despite rising interest rates and slowing sales, home values in the island nation continue to soar. In the first quarter of 2024, prices rose by 1.5%—a good start (and sign) for the year ahead.
Oceania: Perth, Australia
Though isolated from Australia’s population centers, Perth, Western Australia’s coastal capital, is anything but a backwater. The region’s economy is booming, driven largely by its profitable, productive, and diversified mineral and petroleum sectors.
In 2023, Western Australia’s economy grew by 4.7%, significantly outpacing the broader Australian economy. These ongoing economic tailwinds have allowed Perth to remain the fastest-growing capital city in Australia over the past 20 years. In 2023 alone, Perth’s population grew by 3.6%. Today, it is home to over 2.3 million residents and is expected to top nearly 3 million by 2030.
This surge in new migrants—the city adds about 220 people per day—drives up housing demand. Median home prices rose 13.6% year-on-year in March 2024 and are forecasted to finish the year up 20%. Rental prices are also rising, with the median weekly house rent increasing by 18.2% over the same period. Vacancy rates have simultaneously plummeted to a low 0.4%, yet another indication of an extremely tight rental market. These supply-and-demand imbalances are favorable for property investors. Cap rates in Perth, which has experienced expansion, are estimated at 9% for condominiums and 6.4% for houses.
Middle East: Dubai, United Arab Emirates
Strategically positioned on the southeastern shore of the Persian Gulf, Dubai is a contemporary hotspot for global investors. A gateway to Africa, Asia, and Europe, this Arabian trade, tourism, and finance hub grew by 25,776 people in the first quarter of 2024, reaching nearly 3.7 million inhabitants. Dubai’s economy—expected to grow by 3.9% in 2024—attracts substantial foreign direct investment (FDI), accounting for over 32% of FDI in the Middle East and North Africa.
International property investors likewise have a large presence in the city—collectively, they own about 43% of its housing stock. Residential property prices are on a strong uptrend; between March 2023 and March 2024, prices increased by 20.7%, while average rents rose by 21.2% over the same period.
The city’s investment climate is similarly favorable. In sharp contrast to other markets, Dubai features a 0% capital gains, wealth, and income tax rate. Further initiatives like the Golden Visa program, which offers five—or ten-year visas to high-net-worth real estate investors and entrepreneurs, make the city an even more attractive destination for capital deployment.
