The latest report of the Prime Global Cities Index Q2, 2020 from Knight Frank shows Australasia is the strongest performing world region for luxury residential property price growth for the second quarter of 2020.

The Gold Coast has come out on top in the entire region.

The Prime Global Cities Index, which tracks the movement in prime residential prices in local currency across 45 cities worldwide, found five Australian cities – the Gold Coast, Sydney, Perth, Brisbane and Melbourne - were ranked in the top 24 for luxury residential market performance over the past year, with one making the top 10.

At a Glance:

• Five Australian cities – the Gold Coast, Sydney, Perth, Brisbane and Melbourne – were ranked in the top 24 cities around the world for luxury residential market performance over the past year
• The Gold Coast was the strongest performing city in Australia, coming in at number 10 for annual price growth (3.4 per cent), followed by Sydney and Perth at 11 and 12 (both 3 per cent), Brisbane (2.5 per cent) and Melbourne (1.2 per cent)
• Prime Global Cities Index Q2 2020 tracks movement in prime residential prices in local currency across 45 cities worldwide

The Gold Coast was the top ranked city in Australia – and Australasia – coming in at number 10 on the list of global cities with 3.4 per cent annual growth. 

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It was followed by Sydney (ranked 11) and Perth (12), both of which recorded annual growth of 3 per cent. 

Brisbane was ranked 16 (2.5 per cent) and Melbourne was ranked 24 (1.2 per cent). 

Positive growth was recorded for the Gold Coast (1.2 per cent), Sydney (0.3 per cent), Perth (2.3 per cent) and Brisbane (0.3 per cent) over the past quarter.

Melbourne was the only city to record negative growth of -1.0 per cent over the past three months. 

Knight Frank’s Head of Residential Research Australia Michelle Ciesielski said this was the first opportunity Knight Frank had had to take the pulse of prime residential markets globally since the COVID-19 pandemic hit large parts of Europe and the Americas. 

“Globally, the Prime Global Cities Index has reached its lowest rate of annual growth since the last quarter of 2009, when the world was in the grip of the global financial crisis,” said Ms Ceisielski. 

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“Prices increased by 0.9 per cent on average in the year to June 2020, down from 2.3 per cent in March. 

“Despite the COVID-19 pandemic, in the June quarter, 67 per cent of global cities registered flat or positive prime annual price 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 in the year to Q2 2020. 

“The relatively strong performance of Australian cities was a result of the shallow number of listings, keeping property prices firm, and by global comparison we have largely escaped the major impact of COVID-19.” 

Knight Frank National Head of Residential Shayne Harris said demand for luxury property in Australia was likely to continue and potentially grow, with ultra-high-net-worths looking to buy more spacious homes. 

“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,” said Mr Harris. 

“During the pandemic we’ve seen the ultra-wealthy make their next residential property purchase decisions based on liveability, so places like South-East Queensland will become more attractive in a post-COVID world. 

“It is unlikely we will see significant volumes of distressed prime sales as we saw in 2008, during the global financial crisis. 

“Lending criteria is tighter, new supply is constrained in several cities, interest rates are low and there is currently assistance on offer from both lenders and governments.”

World-wide results 

The top performing city in Knight Frank’s Prime Global Cities Index was Manila, with annual luxury residential price growth of 14.4 per cent, followed by Tokyo (8.6 per cent) and Stockholm (4.4 per cent). 

“Manila, Tokyo and Seoul are Asia’s top performers year-on-year, with Stockholm, Geneva and Paris leading Europe’s rankings,” said Ms Ciesielski.

“However, five of these six cities registered flat or falling prime prices in the three months to June. 

“We expect the index to display muted growth in the second half of 2020 before recovering in 2021.”

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View the Knight Frank Prime Global Cities Index Q2 2020 here.

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