Auckland has topped the world for luxury residential price growth, with Sydney, Perth, and the Gold Coast all ranking within the top cities in the world.
Knight Frank’s Prime Global Cities Index Q3 2020, which tracks movement in prime residential prices across 45 cities worldwide, showed that luxury property prices are still rising around the world, despite the global pandemic.
Auckland avoided the worst of the pandemic, and as such, enjoyed annual luxury residential price growth of 12.9 per cent.
Sydney was the strongest performing city in Australia, coming in at number 16 for annual price growth (2.3 per cent), followed by Perth at 17 (2.2 per cent), the Gold Coast at 18 (1.8 per cent), Brisbane at 23 (1.1 per cent), and Melbourne at 26 (0.3 per cent).
Knight Frank’s Head of Residential Research Australia, Michelle Ciesielski, pointed out that while the index increased by 1.6 per cent in the year to Q3 2020, the percentage of cities registering annual price declines is creeping up, from 23 per cent at the end of 2019 to 38 per cent in Q3 2020.
“Australia has so far bucked this trend,” she explained. “With Sydney, Perth, the Gold Coast, Brisbane, and even Melbourne, which has had the most stringent lockdown of all the capitals, continuing to record positive annual growth.
“In fact, Sydney, Perth, and the Gold Coast all recorded growth above the index’s average annual increase.
“Once lockdown was eased, the prime property market was supported by an upward trajectory in the stock market, low interest rates, and ultra-wealthy money which remained at home.
“Most of Australia was fortunate to ease out of restrictions in time to take advantage of the idyllic spring selling season.
“The thin number of prime properties on the market had great exposure to the ultra-wealthy population who would have otherwise been returning from a European vacation.”
“In an age of uncertainty we tend to look for stability in our residential property markets to increase sentiment, and this is currently playing out across the prestige markets of Australia, albeit at differing speeds,” Knight Frank National Head of Residential, Shayne Harris said.
“We expect this to continue into the last quarter of the year, as each state economy strengthens.
“Buyers are looking more favourably at luxury property, mirroring what we saw following the Global Financial Crisis, to build up their wealth portfolios.
“As a result of the pandemic, more are likely to buy a second home to enhance their lifestyle and use as a retreat in the event of future outbreaks.”
“With global equity markets volatile, Brexit looming large, the repercussions from the US presidential election expected to rumble on, and further waves of the pandemic hitting Europe and the US, property’s credentials as a safe and tangible asset class are rising to the fore,” Mr Harris noted.
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