Azizi Riviera

Market 2 min read

In thirty world cities, prime rents have beaten prices for four years running

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When renting outperforms owning for four years in a row, that is not a property story. It is an interest rate story wearing a property costume.

The two headline figures

Across the 30 cities in the Savills World Cities Prime Residential Index, capital values rose 0.6% and rents rose 1.1% in the six months to June 2026. Rental growth was up from 0.5% in the second half of 2025. The report was published on 19 August 2026.

The four-year pattern

Prime rents have outperformed capital values since mid-2022. Savills attributes it to elevated interest rates, affordability constraints and deferred purchase decisions — households choosing flexibility over ownership while the cost of the mortgage is the largest variable in the sum.

Where the growth was

Cape Town and Lisbon were among the strongest rental markets. Tokyo led on capital values, up 7.0% in six months and 20.4% over the year to June. Sixty per cent of the index recorded stable or positive capital value growth.

What it does to yields

Prime yields were broadly stable, which is what happens when rents and values move together. Amsterdam and Berlin recorded no yield movement at all; Lisbon and Los Angeles saw yields compress as values outran rents; Hong Kong and Cape Town saw yields expand as rents outran values.

Historical scale

Before the global financial crisis, prime markets routinely delivered 5% to 7% capital growth every six months. Through the 2010s that settled to 2% to 4.5%. A half-year reading of 0.6% is a slow market by any measure the index has ever recorded.

The reason this matters to a canal-side rental district is that yield expansion and yield compression are the same event seen from opposite sides of a transaction. A landlord reads the Savills pattern as good news: income growing faster than the asset means the cash return on capital already committed is improving. A buyer reads the same pattern as a warning that the entry price is being supported by rent rather than by capital appreciation, which is a much thinner cushion if rents stall. Both readings are correct, and which one applies depends entirely on whether the purchase is already made. The practical caution is about the word prime. Savills tracks the top slice of each market, and in a city where a large volume of new mid-market stock is completing, the prime index and the average apartment can move in different directions for years. Anyone using a global prime index to price a two-bedroom on a canal is using the wrong instrument; use it for direction and sentiment, and use local transaction records for the number.

Source: Savills checked against the source

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