Sydney Leads Prime Housing Price Growth Forecast
The city is expected to see prices rise 10% this year, according to Knight Frank research.
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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 Wednesday 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.
“Government fiscal stimulus measures have been revised upward, protecting jobs and incomes via furlough schemes, meaning there have been few forced property sales,” she said in the report. “Banks in key developed markets offered mortgage holidays to customers reducing repossessions and foreclosures.”
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,” Ms. 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.
Reprinted by permission of Mansion Global. Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: July 20, 2021.
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Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Capital cities lead the way as median home values see clear upswing
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Home values continue their upwards trajectory, recording the strongest monthly growth in 18 months, CoreLogic data shows.
The property data provider reports that their Home Value Index has noted a third consecutive rise in values in May, accelerating 1.2 percent over the past month. This is on the back of a 0.6 percent increase in March and 0.5 percent rise in April.
Sydney recorded the strongest results, up 1.8 percent, the highest recorded in the city since September 2021. The fall in Sydney’s home values bottomed in January but have since accelerated sharply by 4.8 percent, adding $48,390 to the median dwelling value.
Melbourne recorded more modest gains, with home values increasing by 0.9 percent, bringing the total rise this quarter to 1.6 percent. It was the smaller capitals of Brisbane (up 1.4 percent) and Perth (up 1.3 percent) that reported stronger gains.
CoreLogic research director Tim Lawless said the lack of housing stock was an obvious influence on the growing values.
“Advertised listings trended lower through May with roughly 1,800 fewer capital city homes advertised for sale relative to the end of April. Inventory levels are -15.3 percent lower than they were at the same time last year and -24.4 percent below the previous five-year average for this time of year,” he said.
“With such a short supply of available housing stock, buyers are becoming more competitive and there’s an element of FOMO creeping into the market.
“Amid increased competition, auction clearance rates have trended higher, holding at 70 percent or above over the past three weeks. For private treaty sales, homes are selling faster and with less vendor discounting.”
Vendor discounting has been a feature in some parts of the country, particularly prestige regional areas that saw rapid price rises during the pandemic – and subsequent falls as people returned to the workplace in major centres.
The CoreLogic Home Value Index reports while prices appear to have found the floor in regional areas, the pace of recovery has been slower.
“Although regional home values are trending higher, the rate of gain hasn’t kept pace with the capitals. Over the past three months, growth in the combined capitals index was more than triple the pace of growth seen across the combined regionals at 2.8% and 0.8% respectively,” Mr Lawless said.
“Although advertised housing supply remains tight across regional Australia, demand from net overseas migration is less substantial. ABS data points to around 15% of Australia’s net overseas migration being centred in the regions each year. Additionally, a slowdown in internal migration rates across the regions has helped to ease the demand side pressures on housing.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
