According to research released today by Knight Frank – Lisbon, Monaco, Vienna and Shanghai are the only four major prime residential markets set to see price growth throughout the remainder of 2020 as the impact of Covid-19 takes its toll on luxury residential property markets around the world.
Analysis by Knight Frank of 20 cities globally highlights the direction of travel for prime prices in 2020 and 2021 based on projections for demand and supply, the impact of Covid-19 in the different markets and the varying government stimulus measures announced. The scale of global economic uncertainty is unprecedented and therefore putting an exact figure on forecasts is challenging. As a result, Knight Frank has placed the 20 cities analysed into four price bands including markets that will see: strong price growth (+5% or more), low price growth (0% to 5%), flat or low price falls (0% to -5%) and strong price falls (-5% or less).
At the start of the year, Knight Frank predicted a number of markets around the world would see healthy prime price growth. Paris led Knight Frank’s Prime Global Forecast for 2020 with expected growth of 7%, Miami and Berlin were set to see rises of 5% and prime price growth was anticipated in Geneva and Sydney at 4% respectively.
Liam Bailey, global head of research at Knight Frank said; There were positive signs in several markets globally that prime prices would rise throughout 2020 but unsurprisingly, Covid-19 has put a halt to that. Of the 20 cities Knight Frank has analysed, 16 of these will see prime price declines in 2020, with only a handful avoiding a fall into negative territory – either because of historic supply shortages or because transactions were able to continue during lockdown and these measures are already being eased.”
Of the cities set to see a decline in prime prices, those likely to be hit hardest are either emerging markets or cities that were already seeing weak price growth at the end of 2019. Singapore is one exception; Knight Frank predicted prime prices would rise by 3% throughout 2020 but the fall-out of Covid-19 and the length of time the Singapore market has been affected, changes the prediction to a decline of up to 5%.