Despite the pandemic, more residential ‘super-prime’ sales above US$10m took place in London in 2020 than any other global market according to Knight Frank. US$3.7 billion transacted in the city at this level, outpacing usual rivals of New York and Hong Kong.
Analysing sales and transaction data of 12 super-prime residential markets around the world, Knight Frank’s research reveals that overall, global sales above US$10m fell only marginally (-1%) in 2020 compared to the previous year, despite temporary property market shutdowns and travel restrictions in place. These challenges were offset by greater demand from domestic buyers, reassessing their property needs. Volumes, or total spend declined 5% overall.
Flora Harley, associate, residential research at Knight Frank said: “There was a significant variation in performance of the cities depending on location and characteristics of the market. Sales rose in nine of the 12 markets tracked with buyers spending a total of US$18.9 billion across 1,066 sales. Globally the average super-prime sale price stood at US$17.7m for 2020, 4% below the 2019 average.”
The UK capital saw transactions rise by 3% in 2020, while Hong Kong and New York saw theirs fall by 27% and 48% respectively. Domestic buyers accounted for a third of all activity in London’s £10m+ market, up from 12% a year earlier. European buyers were also more prevalent due to the relative ease with which they could reach the city.
Liam Bailey, global head of research at Knight Frank said: “London’s super-prime residential market shrugged off Brexit and even looked through the pandemic – confirming the UK capital as the world’s leading wealth destination. After five years of price falls, the capital is set for a reset and the latest numbers from Knight Frank’s super-prime data confirm that London is on top of the world.”
New York’s super-prime property market faced a series of challenges throughout 2020. The US real estate market, typically slow leading up to a presidential election year also had to contend with being hit hard by Covid-19 in the early stages of the pandemic and real estate showings were prohibited between March and July 2020. Despite the drop in sales transactions, the average sale price was up 5% year-on-year, indicating that purchasers were looking towards the higher end of the market, seeking larger homes. The overall market gained momentum post-election, continuing through the early months of 2021. Particularly, the super-prime market witnessed a 60% increase in sales compared to the same period in 2020. Much of that activity came from domestic buyers.
In contrast, waterfront property markets in the US stood out with super-prime transactions in Miami (89) more than doubling compared to 2019. Palm Beach and Los Angeles also saw an increase of 78% and 26% in sales above US$10m respectively.
Echoing the rise witnessed in prime property prices in 2020, the two Australian markets tracked saw sales above US$10m rise. In Sydney, 55 transactions took place in 2020, up from 26 a year earlier, and in Melbourne sales rose to nine from six the previous year.
Taking a look at the average super-prime sale price across the 12 markets analysed, Geneva leads the way with an average sales price of US$20.1m, up 13% compared to the previous year. It was a strong year for the Swiss city across the board, with super-prime sales rising 76% to 37 transactions in 2020.