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 $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.”
Maggie Lee, Senior Director and Head of Residential Agency at Knight Frank Hong Kong said, "Despite the pandemic, top-of-the-line residential assets continued to receive strong interest from the ultra-high-net-worth individuals (UHNWIs). So far in 2021, we have seen a good number of transactions of super-prime residential properties at record-high prices, surprising the market amid market downturn. Given the scarcity of home supply in Hong Kong’s wealthiest district, the super-prime property assets are deemed to be safe havens for the wealthy buyers."
Taking a deeper dive into transactions and sales data at the very top-end of the global property market, Knight Frank has revealed that the ‘ultra-prime’ property market, above US$25m was less active throughout 2020 than 2019. Sales fell by 13% to 139 transactions, representing US$5.6 billion.
Paddy Dring, Global Head of Prime Sales and Chairman of Knight Frank’s Private Office said: “London comes out on top in this price bracket as well, regaining the title of the largest ultra-prime market for the first time in five years, with 31 sales. Whilst this is two fewer than 2019, the total volume in this segment grew by 5%.”
Owing to the COVID-19 pandemic and deepened economic recession, total transactions of the ultra-prime residential properties has dropped visibly compared to the previous year. Hong Kong drops into second position with 23 transactions of ultra-prime properties of over US$25m, compared to 42 transactions a year earlier. As coronavirus lockdown keeps foreign and Mainland Chinese buyers away, market activity has been largely reduced. Nonetheless, the ultra-prime segment remains resilient, as proven by the notable transactions with record-high prices despite the market downturn.