Joel RobinsonNovember 23, 2020
Sydney's prime residential property price growth is set to rise higher than the global average in 2021, Knight Frank's Prime Global Forecast 2021 report has found.
They expect Sydney to see three per cent growth, compared to the global forecast of two per cent.
Melbourne is set for a positive 2021, with a more modest one per cent growth forecast.
Knight Frank expect prime sales in
Melbourne to pick up post lockdown, however they predict that demand will remain lower in 2021 with a solid pipeline of new prime supply.
They only forecast a marginal increase in new supply in Sydney's prime real estate in 2021.
Sydney has been grouped alongside London, Paris, Berlin and Madrid as cities whose prime prices are expected to rebound, assisted by low interest rates, pent-up demand, tax holiday or because of firm market fundamentals.
Knight Frank’s head of residential research Australia Michelle Ciesielski said the top three key prime property market drivers for Sydney are the pandemic-fuelled domestic demand, supply shortage and low interest rates.
“These will be balanced out by the risks identified in the report’s Risk Monitor – for Sydney prime property the biggest risks ahead are the global and local economic performance, travel restrictions and the government’s ongoing response to the pandemic,” she said.
Knight Frank national head of residential Shayne Harris said prime property sales were back to pre-pandemic levels in Sydney, while that was not yet the case in Melbourne.
“In Sydney, we are seeing a higher than expected volume of wealthy expats wishing to return home, which will grow the buyer pool for prime residential property as international travel restrictions ease over the coming months and years.," Harris said.
“Many of the wealthy population are considering expanding their property portfolios while the prime market records modest growth and low interest rates cheap.
The Knight Frank Prime Global Forecast found Shanghai and Cape Town lead the expectations for prime price growth in 2021, with annual price growth of five per cent forecast.
