Sydney’s luxury home market is expected to lead the world in growth, with London-based global real estate consultant group Knight Frank predicting a 10 percent price jump in 2021.
In its latest research, Sydney is also forecasted to top Miami (6 percent) and Los Angeles (5 percent) in prime residential property price growth this year.
This comes after the first quarter of the year saw 1,429 luxury home sales recorded in Sydney—the highest quarterly figure on record for the city.
“Closed borders have seen wealthy Australians purchase at home instead of abroad,” the report said.
Knight Frank’s head of Australian residential research Michelle Ciesielski said the lockdowns were carrying Sydney’s premium property market as wealthy Aussies were purchasing at home instead of overseas.
“Although lockdowns are currently in place, exclusive viewings are custom when buying prestige residential property,” Ciesielski told The Australian Financial Review. “In many instances off-market purchases were already taking place with ultra-wealthy Australians who have been grounded on home soil for the past 16 months.”
Sydney is also predicted to lead top growth in 2022 with London, as both cities are forecasted to grow a further 7 percent year-on-year.
Ciesielski said the luxury market has recorded constant growth every quarter since March 2013, demonstrating the ongoing undersupply of new prime real estate as the ultra-wealthy population grows.
“The past three consecutive quarters has resulted in the highest number of prime sales transactions on record, so this mounting turnover suggests there is still depth in the market for 2022 especially given Australia’s international borders are likely to remain closed for the foreseeable future,” Ciesielski said.
Knight Frank’s global research team has undertaken three prime forecasts since the start of the pandemic, with the average forecast tracking higher each time. In May 2020, they predicted a 1 percent climb for 2021, which was increased to 3 percent in Dec. 2020 and now 4 percent in July.
Sydney was awarded as the ‘most improved market’ after the 2021 market forecast rose to 10 percent from just 3 percent in the last report.
The global prime price forecasts have increased over the past half year due to government stimulus measures, higher household savings, supply issues, and changing work patterns.
Perth led Australia in prime annual growth during 2020 followed by Gold Coast and Brisbane, according to earlier research.
Prime real estate is defined as the top 5 percent of the market.