Sydney Leads Prime Housing Price Growth Forecast
The average price of a luxury property in Sydney, Australia, is set to rise 10% this year, the biggest jump of any city included in Knight Frank’s prime residential price forecast, released on 21st July in the U.K.
Next year, Sydney is on track to share the top spot with London. Average prices in both cities are expected to jump 7% in 2022, according to Knight Frank. Although that’s a dip for Sydney prices, it marks a 5% increase for London, where 2021 prices are set to rise just 2%—the smallest uptick on the index.
Across the 11 cities considered, average prime prices are set to jump 4% in 2021, according to Knight Frank. That’s up from a 1% increase predicted by Knight Frank early in the Covid-19 pandemic in May 2020, and a 3% rise in December 2020. Government measures have helped protect economies, and cities are now on the rebound, according to Kate Everett-Allen, head of international residential research at Knight Frank. In addition, the pandemic has inspired many buyers to relocate or expand their holdings.
“Households accrued a total of over US$5 trillion globally in savings during lockdown, enabling some homeowners to undertake home improvements,” Everett-Allen continued. “Others have opted to relocate, upsize, downsize or buy a second home/investment property.”
This year, Miami is predicted to have the second-highest growth in average prices, 6%, with a 4% bump in 2022, the data showed. Los Angeles and Hong Kong followed, both with 5% increases predicted for 2021 and 2022. New York should see prices rise by 4% this year, which would be the first positive price growth since 2018 and its strongest performance since 2015, according to Knight Frank. In 2022, they are set to rise 3%.
And although average prices in Madrid are predicted to tick up 3% in 2021, they could rise 6% in 2022, the brokerage forecasted. Potential headwinds that could stymie the market include slow vaccine rollouts and the unknown path of the Delta variant of the Covid-19 virus, rising interest rates and government cooling measures, according to the report.