Prime property prices are likely ‘to display some resilience in most markets’, says Knight Frank
Bangkok, Singapore and Hong Kong saw the weakest property price performance of any prime global cities in Q1, reports Knight Frank, as the Coronavirus crisis struck first.
Unsurprisingly, Asian cities saw the weakest property price growth in Q1 this year, as the region was the first to face the Covid-19 crisis. All five of the weakest-performing locations in Knight Frank’s Prime Global Cities Index are in the region, led by Bangkok (-5%), Singapore and Hong Kong. “All eyes are now on these markets to watch their pace of recovery,” says KF’s Kate Everett-Allen.
Reports suggest that transaction activity is already picking up in China, although data from Singapore looks to be stuttering following the resurgence in Covid-19 cases
Three quarters (76%) of tracked global cities still managed flat or positive growth in the first three months of the year. Europe emerged as the period’s strongest property market, despite an escalating Coronavirus crisis in Italy and Spain and nascent outbreaks in the UK and other countries. “It is likely to be Q2 before we can accurately gauge the full impact of the disease on prime housing markets globally,” notes Knight Frank’s research team, but “there is some value in looking back at where we were before the crisis took hold.”
Thelast Indexsuggested that several markets – notably London, New York and Vancouver – were entering into a new phase of their property market cycles. “After several years of prime price declines, in part due to taxation and regulation, we were starting to see sales volumes gain traction and this was certainly evident in January and February,” says the team. “This story continued in the first quarter of 2020 with all three cities seeing their rate of annual decline moderate further in Q1 2020.”
Widespread lockdowns and travel restrictions mean that transaction volumes will drop markedly in Q2, but the KF team expects “prime prices in most markets to display some resilience.”
Source: PrimeResi / Knight Frank