The buyers of prime residential properties in Mumbai are expected to remain cautious in 2020 due to deteriorating economic environment impacting market liquidity and an additional 1% stamp duty being levied by the Maharashtra government, taking the total to 6%.
KNIGHT FRANK PRIME GLOBAL FORECAST 2020
Rank | Cities | Price appreciation expected in 2020 (Values in %) | 1-year price change in % (Q3’18-Q3’19) | 10-year price change in % (Q3’09-Q3’19) |
1 | Paris | 7 | 4.2 | 47.1 |
2 | Berlin | 5 | 6.5 | 145.7 |
2 | Miami | 5 | 1.5 | 51.4 |
3 | Geneva | 4 | 5.6 | 19.6 |
3 | Sydney | 4 | 2.6 | 69.8 |
4 | Madrid | 3 | 4.2 | 35.4 |
4 | Singapore | 3 | 1.2 | 41.6 |
4 | Melbourne | 3 | 2.0 | 64.1 |
5 | Los Angeles | 2 | 0.7 | 53.0 |
5 | London* | 2 | -3.9 | 40.9 |
6 | Hong Kong | Static | -1.3 | 45.8 |
7 | Mumbai | -1 | 0.8 | 12.7 |
8 | Dubai | -2 | -3.7 | -7.8 |
9 | New York** | -3 | -4.4 | 23.5 |
10 | Vancouver | -5 | 10.2 | 85.3 |
* Forecast as at Dec 2018, new forecast available post UK election **Manhattan
According to Knight Frank Prime Global Cities Index Q3 2019, while Mumbai was ranked as the 28th fastest-growing prime residential market in the world, registering a 0.8% YoY increase in average capital value in Q3 2019, the prices had actually remained stable in the past three months. In the last decade, Mumbai has seen a 12.7% price appreciation in prime residential properties. The Index also highlighted that the change in prime residential prices for all 45 cities tracked by the Index averaged 1.1% in the year to Q3 2019, growing at the slowest rate in a decade.
Both demand and sales of prime residential properties in Mumbai are expected to see a slight fall, while the supply of luxury homes is estimated to drop significantly in 2020, according to Prime Global Forecast 2020. The average capital values of prime residential properties in Mumbai currently stands at Rs 64,775 per sq. ft, making it the most expensive city for buying luxury homes in India.
Paris leads the prime residential forecast for 2020 with an expected price growth of 7%, followed by Berlin and Miami in the second place with a 5% growth each, and Geneva and Sydney at the third place, with an expected prime residential price growth of 4% each. A prime residential property is defined as the most desirable and most expensive property in a given location, generally defined as the top 5% of each market by value. In the Prime Global Forecast 2020 report, Knight Frank’s analysts provide their price forecast for 2020, taking account of the latest economic indicators, supply, demand and sales trends.
The report also highlights the 10 biggest risks to prime residential markets in 2020 as global economic slowdown, global trade war, local economic slowdown, changes to property market regulations, geopolitical crises, change in government/upcoming election, emerging market volatility, oversupply of luxury homes, currency instability, Brexit, US Federal Reserve rate changes and commodity prices.