Amid a Pandemic, Global Luxury Home Prices Accelerated
Average prices for luxury residential properties rose 1.9% in 2020, unexpectedly inching up from the 1.8% rise measured in 2019, according to Knight Frank’s Prime International Residential Index released on 24th February in the U.K. Still, 29 of the 100 locations considered in the index saw year-over-year price declines in 2020, compared to 21 in 2019. By contrast, five markets showed double-digit price increases in 2020, compared with only two during the previous year. Auckland had the biggest jump in average price for prime properties, which were close to 18% more expensive in 2020 compared with 2019, the data showed. “New Zealand’s handling of the Covid-19 crisis, its rapid economic recovery, ultra-low mortgage rates and a limited supply of quality stock were behind the surge,” Kate Everett-Allen, Knight Frank’s head of international residential research, said in the report. “Expect some intervention in 2021, as the government looks to rein in price inflation by tightening lending rules or raising taxes.” The next three spots on the index were in Asia. Average prices in 2020 were up 13% in Shenzhen, 12% in Seoul and 10% in Manila, according to the index. One surprise in the data was how quickly some cities in Asia rebounded, especially among mainland Chinese markets. Property sales volumes across 30 major Chinese cities had returned to the average daily levels observed in 2019 by March 26, 2020, according to data from Capital Economics cited in the report. On the other end of the index, Buenos Aires saw a 12% decline in luxury home prices, the data showed. “With properties priced in U.S. dollars but mortgages offered only in pesos, not to mention capital controls, buying property in Argentina is far from straightforward,” Everett-Allen wrote in the report. Cape Town, Bangkok and Hong Kong also saw steep drops in prices, which declined 9.2%, 7.3% and 6.9%, respectively. Overall, the regions of North America and Australasia—which encompasses Australia, New Zealand and some neighboring islands—saw the biggest collective increases in sales prices, at 6.3% and 4.9%, respectively. The pandemic pushed many buyers, especially in North America, to look for property in a coastal or resort destination, or in a rural location, according to the report. But that was not the case in Asia, where city living still reigns. “Urban living remains aspirational in Asia,” Justin Eng of Knight Frank Asia-Pacific said in the report. “If you live in a major metropolis such as Tokyo, Shanghai or Hong Kong and want more space, you buy a bigger apartment, you don’t move back to the countryside.”
Tags : INTERNATIONAL pandemic Global Luxury Home Prices Accelerated