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Since the start of the pandemic Knight Frank’s global research team has undertaken three prime price forecasts, with the average overall forecast tracking higher each time. Back in May 2020, Knight Frank envisaged prime prices climbing 1% on average in 2021, this changed to 3% in December 2020 and in July 2021 now sits at 4%.
The award for most improved market goes to Sydney with our 2021 forecast rising from 3% in December 2020 to 10% in July 2021, a rise of 7%. Closed borders have seen wealthy Australians purchase at home instead of abroad. The first quarter of 2021 saw 1,429 prime sales recorded, the highest quarterly figure on record for Sydney and despite recent lockdowns momentum is being maintained.
Hong Kong and New York aren’t far behind Sydney with their 2021 forecasts shifting up by 5% and 4% respectively between December 2020 and June 2021.
According to Martin Wong, Head of Research and Consultancy at Knight Frank Greater China, “Despite four waves of the virus, Hong Kong’s luxury residential market has proved resilient with several transactions of note taking place in The Peak and Mid-Levels in the first half of 2021. Economic forecasts have been revised upwards, 43% of the population has now had their first vaccination and sentiment is improving with capital flows from the Chinese mainland a key driver. We expect the prime residential price could grow another 2-3% in the second half of 2021.”
The outlook for prime residential markets will be closely tied to the ease with which cross-border transactions can start to normalise, and whilst virtual viewings and improved technology have assisted in this area, the reality is the resumption of commercial air travel will be key.
Key factors which could boost or stymie prime markets over the next 12 months:
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