Monaco continues its reign as the world’s most expensive city where US$ 1 million can get you 15 square metres of space in 2020.
• Cities from Australasia, Asia and Europe dominate the top 10 best performing prime residential markets
• Global prime markets register an average price rise of 1.9% in 2020, eclipsing its 2019 performance of 1.8%
• Auckland tops the PIRI 100 list by registering an annual price rise of 17.5%. Asian cities occupy the following top spots: Shenzhen (13.3%), Seoul (11.7%) and Manila (10.2%)
• Prime property markets in Delhi (-0.1%), Mumbai (-1.5%), Bengaluru (-2.0%), register annual decline in prices in 2020
House prices are rising because of the pandemic, not despite it. According to Knight Frank’s Prime International Residential Index (PIRI 100), the global prime residential pricing has registered an increase of 1.9% year – on – year (YoY). Luxury housing markets performed better than expected in 2020, with 66 of the 100 markets featured in PIRI recording annual price growth of 2%. PIRI 100 tracks the movements in luxury residential prices across the world’s top residential markets.
Globally, Delhi ranked 72nd in terms of luxury residential prices which remained marginally lower at -0.1% YoY in 2020.
Mumbai (ranked 77th) and Bengaluru (ranked 79th) registered a decline of 1.5% and 2.0% YoY respectively in prime residential prices.
With respect to the PIRI 100 list, Auckland, in New Zealand tops the table by registering an annual price rise of 17.5% YoY, while Buenos Aires, in Argentina was the worst-hit city globally, down by 12% YoY.
Luxury residential market’s performance, annual price change from December 2019 to December 2020. All price changes are in local currency.
Kate Everett-Allen, head of international residential research at Knight Frank, said “Expectations of second homes are increasing. With greater flexibility around remote working, owners are lengthening their stays with many now viewing them as ‘co-primary’ homes. From fast broadband to cinema rooms, gyms and A-grade technology, a second home now has a long wish list to fulfil.”
HOW MUCH SPACE CAN $1 MILLION BUY?
Monaco continues its reign as the world’s most expensive city where US$ 1 million can get you 15 square metres of space in 2020. Comparatively in Mumbai, you can purchase 106 square metres (1141 sq. ft.) of prime residential real estate, a 3.7% increase compared to 102 square meters (1100 sq. ft.) in 2019.
Shishir Baijal, Chairman & Managing Director, Knight Frank India, said “2020 has been a year that saw COVID-19 influenced slowdown not only in the real estate industry but overall, in the economy. The policy decisions by the Maharashtra and Karnataka Governments to reduce the stamp duty have acted as a counterbalance to the disruption caused by the pandemic. The luxury residential sales saw an exponential surge in Mumbai in Q4 2020 and the demand outlook for 2021 remains resilient. The current market price offers a premium value to make a luxury residential asset purchase in Indian cities for both domestic and global wealthy individuals.”
Area (in square meters) purchasable for US$1 million over the last 5 years for Delhi, Mumbai and Bengaluru:
How many square metres of prime property does US$1 million* buy in key cities?
*Exchange rates calculated at 31 December 2020 | Source: Knight Frank Research, Douglas Elliman, Ken Corporation
KEY DRIVER FOR PRIME RESIDENTIAL REAL ESTATE:
According to Knight Frank’s upcoming Wealth Report 2021, 26% of the Ultra High Net Worth Individuals (someone with a net worth of over US$30 million including their primary residence) globally are planning on purchasing a home in 2021, with the main desire to upgrade the main residences. Globally, the pandemic is supercharging demand for locations that offer a surfeit of wellness – think mountains, lakes and coastal hotspots. The report also highlights that 19% of India’s ultra-wealthy are considering buying a home in 2021.