- COVID pandemic wreaking havoc on all price points in lux global housing markets
- Only Lisbon, Monaco, Vienna and Shanghai expected to see low level price growth throughout 2020
Knight Frank, UK’s leading independent real estate company with over 500 offices around the globe, projects only Lisbon, Monaco, Vienna and Shanghai to see prime price growth in their respective luxury housing markets throughout the remainder of 2020. Such price growth is expected to be at a low level of +0.1% – 5%.
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Knight Frank arrived at its projections by analyzing prime prices in 20 cities around the globe based on supply and demand, various impacts of the COVID pandemic in each different and market plus the different governmental stimulus measures announced by each country. Knight Frank was quick to point out, however, that all of its forecasting is suppositional and challenging due to the uncertainty created by the pandemic.
According to Liam Bailey, global head of research at Knight Frank, wrote in the firm’s latest report focused on prime price growth globally, “There were positive signs in several markets globally that prime prices would rise throughout 2020, but unsurprisingly, CovID-190 has put a halt to that. Of the 20 cities Knight Frank has analyzed, 16 of these will see prime price declines in 2020, with only a handful avoiding a fall into negative territory – either because of historic supply shortages or because transactions were able to continue during lockdown and these measures are already being eased.”
Frank Knight is predicting that the cities of Buenos Aires, Mumbai, Hong Kong, Singapore and Vancouver well be the hardest hit by the largest price falls. The estate agency defines “largest price falls” as being a drop of 5% or more.
You’ll note that all of these above “hardest hit” markets except Singapore are either emerging markets or market locales that saw weak price growth at the end of 2019.
Knight Frank expects that most markets will rebound at least slightly in 2021 with Lisbon and London leading the way. According to Kate Everett-Allen, head of international residential research with Knight Frank, wrote in this forecasting report, “In Lisbon, Portugal’s handling of the crisis combined with strengthening demand and limited prime supply, will underpin price growth. In London’s case, the political certainty provided by last December’s general election boosted housing market confidence during January and February. With prices in some areas down as much as 25% over the last five years, we expect a sharp uptick in 2021.”
Thanks to MansionGlobal.