Australasia has been identified as the strongest performing region in the world in terms of luxury residential property price growth, according to the results of a global study.
The Knight Frank Prime Global Cities Index tracks the movement of residential prices across 45 cities around the world. In the year to Q2 2020, five Australian cities – the Gold Coast, Sydney, Perth, Brisbane and Melbourne – made it into the top 24 for luxury residential market performance over the past 12 months.
The Gold Coast was the highest ranked city within Australia, claiming number 10 on the list and posting 3.4% annual growth.
“Knight Frank’s analysis by world region shows prime prices in Australasia and North America were the most resilient in the second quarter of 2020, with Australasia the strongest performing world region,” said Michelle Ciesielski, Knight Frank’s head of residential research Australia.
“The relatively strong performance of Australian cities was a result of the shallow number of listings, keeping property prices firm. By global comparison, we have largely escaped the major impact of COVID-19.”
Even with the pandemic, over the June quarter, 67% of global cities registered flat or positive prime annual price growth.
In terms of Australian placements, the Gold Coast was followed by Sydney, ranked 11 and Perth which came in at 12 – both of which recorded annual growth of 3%.
Brisbane was ranked 16 with 2.5% growth and Melbourne sat at 24 with 1.2% annual growth.
Knight Frank national head of residential Shayne Harris expects demand for luxury property in Australia to not only hold steady, but perhaps even grow.
“In cities such as Sydney, we are seeing more demand for higher-value properties such as large detached homes or generously-sized apartments, which is supporting prime residential values,” he said.
“During the pandemic, we’ve seen the ultra-wealthy make their next residential property purchase decisions based on liveability, so places like southeast Queensland will become more attractive in a post-COVID world.”
Given the tighter lending criteria, limited supply of dwellings, low interest rates and both governmental and bank-driven aid, Harris does not foresee significant volumes of distressed prime sales as were evidenced in 2008 during the global financial crisis.
Manila was the top performing city in the index, with annual luxury residential price growth of 14.4%, followed by Tokyo (8.6%) and Stockholm (4.4%).