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Real estate has remained a safe bet for the luxury sector during the health crisis. Investment has been strong around the world, according to the Knight Frank Prime Global Cities Index, which has surveyed property price rises from Q1 2020 to Q1 2021.
The Knight Frank Prime Global Cities study was able to identify price increases in real estate in the major international metropolises over the past year. Interesting results, which can be linked to the pandemic that hit the world and had a major influence on the figures.
First and foremost, worldwide, there was a 4.6% increase in purchases in the sector in the period March 2020 – March 2021. No fewer than eleven cities have recorded double-digit growth this year, compared with just one the year before. This is due to low mortgage rates – which are at an all-time low in some markets – tight inventory levels and a desire for a change of scenery after the multiple restrictions of Covid-19.
It should be noted that the notion of luxury real estate has been delimited according to the 5% of the highest prices in the housing market.
Asian domination
The three leading cities that experienced the highest increase in luxury real estate are all in China: Shenzhen in number 1 (+18.9%), Shanghai in 2nd place (16.3%) followed by Guangzhou in number 3 (+16.2%). These three leading cities in the index owe their positions to the improved economic climate, particularly in the Greater Bay Area. And despite a new round of health restrictions in January, buyer enthusiasm has not waned.
Vancouver rounds out the ranking in 4th place. In addition to the 15.2% increase, residential sales in Greater Vancouver rose by 22% in 2020 compared to the previous year. The Canadian municipality is followed by Seoul in fifth place with +14.8%.
The next top 10 are St Petersburg (+13.4%), Los Angeles (+12.6%), Moscow (+12.4%), Taipei (+12.2%) and Miami (+10.2%). Except for the places occupied by Russia, Europe remains the great absentee in the top 10 positions despite its predominance in the sector some time ago. Nevertheless, our continent benefits from the twelfth place with Geneva (+9.2%). The only newcomer to the 46-country ranking this year is Lisbon, with its +2.4% increase, which has moved straight into 24th place, thus outclassing some major cities…
Major centres on the decline
While the increase is confirmed for many cities around the world, some large areas have seen a collapse in their rates, notably New York (-5.8%), making the Big Apple the last city in the ranking genericforgreece.com. This is due to the introduction of a new capital gains tax on non-primary residences that are purchased as investments and held for less than 10 years. Added to this are the tax proposals of Joe Biden, who has expressed his desire to reduce the wealth imbalances exacerbated by the pandemic.
In addition to New York, the metropolises with negative results were Hong Kong (-3.1%), London (-3.5%), Dubai (-3.6%) and Paris (-3.7%). There is a combination of factors behind the negative growth in each city, ranging from long and severe closures, to a lack of bidding, to higher taxes or political constraints. However, in most cases, we expect growth to return in the second half of 2021, when travel bans are lifted, cross-border transactions resume and consumer confidence improves.
Read also > LUXURY REAL ESTATE : EXTERIORS INFLATE PROPERTY PRICES
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Real estate has remained a safe bet for the luxury sector during the health crisis. Investment has been strong around the world, according to the Knight Frank Prime Global Cities Index, which has surveyed property price rises from Q1 2020 to Q1 2021.
The Knight Frank Prime Global Cities study was able to identify price increases in real estate in the major international metropolises over the past year. Interesting results, which can be linked to the pandemic that hit the world and had a major influence on the figures.
First and foremost, worldwide, there was a 4.6% increase in purchases in the sector in the period March 2020 – March 2021. No fewer than eleven cities have recorded double-digit growth this year, compared with just one the year before. This is due to low mortgage rates – which are at an all-time low in some markets – tight inventory levels and a desire for a change of scenery after the multiple restrictions of Covid-19.
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Real estate has remained a safe bet for the luxury sector during the health crisis. Investment has been strong around the world, according to the Knight Frank Prime Global Cities Index, which has surveyed property price rises from Q1 2020 to Q1 2021.
The Knight Frank Prime Global Cities study was able to identify price increases in real estate in the major international metropolises over the past year. Interesting results, which can be linked to the pandemic that hit the world and had a major influence on the figures.
First and foremost, worldwide, there was a 4.6% increase in purchases in the sector in the period March 2020 – March 2021. No fewer than eleven cities have recorded double-digit growth this year, compared with just one the year before. This is due to low mortgage rates – which are at an all-time low in some markets – tight inventory levels and a desire for a change of scenery after the multiple restrictions of Covid-19.
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