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Knight Frank’s Prime Global Forecast 2019 predicts a convergence of price growth across the world’s key residential markets

02 January 2019

Kate Everett-Allen, Partner, International Residential Research at Knight Frank commented, “Of the 15 cities monitored, the key European cities of Madrid, Berlin and Paris, lead our forecast for 2019 with growth of 6%. Still positive, but marginally down on 2018, the normalisation of monetary policy, weaker economic growth and a fragile political landscape post-Brexit will influence demand, but the relative value of these cities remains a key driver.”

Knight Frank’s Prime Price Forecast 2019:
Taking account of the latest economic indicators, supply, demand and sales trends, Knight Frank predicts price performance in 15 cities worldwide

Ranking City Prime Price Forecast, annual growth in 2019
1= Madrid 6%
1= Berlin 6%
1= Paris 6%
4 Miami 5%
5 Vancouver 3%
6 Los Angeles 2%
7 Sydney 2%
8 Geneva 1%
9 Melbourne 1%
10 London 1%
11 New York 0%
12 Singapore 0%
13 Dubai -2.4%
14 Mumbai -5%
15 Hong Kong -10%

Top performers over the last 10 years:

•    Prices in Vancouver have risen by 101.5%

•    Sydney sits in third place with a rise of 60%
 
•    New York comes bottom of the ranking recording price growth of 15.2% over the 10-year period

Events to watch in 2019:
  
•    A number of key events in 2019 are likely to impact prime residential markets:

     o    The UK is expected to leave the EU on 29 March 2019

     o    New five to 10-year investment visas and five-year retirement visa for 55  years+
 
     o    The government in Mumbai will begin to implement a developer tax on unsold inventory
 
     o    In Hong Kong, stamp duty is likely to remain unchanged but loan-to-value ratios could be relaxed
 
     o    The full implications of State and Local Tax deductions (SALT) in the US will be understood in April 2019 as tax returns are filed

Trends to monitor:

•    Follow the tech – universities, start-up industries and technology parks will be key drivers of future growth

•    2019 may be the year US buyers increase their share of overseas purchases

•    In established western markets, non-traditional real estate sectors such as student accommodation, retirement living and build-to-rent will outperform the wider market
 
•    More cities will enter the ultra-prime market. San Francisco, Chicago, Dallas, Beijing and Shanghai are expected to join the select club of cities where three or more sales above US$25m take place annually.