According to the Prime International Residential Index recently released by Knight Frank, a UK-based real estate consultancy, the average price of luxury homes will rise 1.9% year-on-year in 2020, even slightly up from the 1.8% growth rate in 2019 .
Nonetheless, luxury Home prices fell year-over-year in 29 of the 100 cities tracked by the index, up from 21 in 2019. In contrast, five markets saw double-digit growth in luxury home prices in 2020, compared to just two the year before.
The data shows that the average price of high-end properties in Oakland will grow the fastest in 2020, rising nearly 18 percent compared to 2019.
Kate Everett-Allen, head of global residential research at Knight Frank International, said in the report, “New Zealand’s excellent Epidemic-resistant performance, rapid economic recovery, extremely low mortgage rates and limited inventory of prime properties are all important factors driving the price spike. However, the government is expected to intervene somewhat in the market in 2021 to rein in rising house prices by tightening lending or raising tax rates.”
The second through fourth places in the index ranking are all Asian cities. in 2020, luxury home prices in Shenzhen, Seoul and Manila rose 13 percent, 12 percent and 10 percent, respectively, year-over-year.
What is surprising is how quickly some Asian cities have rebounded, especially in mainland China markets. Citing data from Capital Economics, a leading British economic research firm, the report said that home sales in 30 major cities in mainland China have returned to their daily average levels of 2019 as of March 26, 2020.
On the other hand, Buenos Aires ranked at the end of the index due to a 12% year-on-year drop in luxury home prices.
Everett Allen writes in his report that “with homes denominated in U.S. dollars but mortgages only available in pesos, not to mention stringent capital controls, it’s never easy to buy a home in Argentina.”
Meanwhile, luxury home prices in Cape Town, Bangkok and Hong Kong also plunged, falling 9.2 percent, 7.3 percent and 6.9 percent, respectively, from the same period in 2019.
Regionally, North America and Australasia (which contains Australia, New Zealand and some neighboring islands) saw the fastest growth in luxury home sales prices, with year-over-year gains of 6.3 percent and 4.9 percent, respectively.
The report said the new crown epidemic has prompted many buyers, especially in North America, to look for homes in coastal areas, resorts or rural areas. But in Asia, where urban living dominates, this is not the case.
Urban living is still attractive in Asia,” said Justin Eng, associate director of Asia-Pacific at Knight Frank International. If you live in a cosmopolitan city like Tokyo, Shanghai or Hong Kong but want more living space, the odds are you will acquire a larger apartment rather than move back to the countryside.”
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