Knight Frank’s Prime Global Forecast predicts that prices in Sydney are set to rise by 9% this year - making the city the second-best performing city in the world. In first place is Miami, which is expected to experience a 10% rise in luxury property prices.
The report defines the prime residential market as being “the most desirable and expensive property in a given location, generally defined as the top 5% of each market by value.”
The prediction considers the reopening of borders, the return of investors and an expected trend among locals to purchase a second home - factors that will contribute to accelerated prices across the nation.
Michelle Ciesielski, Knight Frank Head of Residential Research, says, “Although Sydney’s mainstream market has rebounded to record 24% annual growth in the year to Q3 2021, the prestige market has experienced a lengthier run of upward trajectory in prices as this market advances in line with other developed global cities.”
“There have now been 35 consecutive quarters of uninterrupted positive annual growth in Sydney’s prime market, averaging 7.3% growth since 2013. Although we’re hearing of record prices being achieved at the very top end, the growth in the prestige market is steadily coming off a much higher footing.”
“If we were to compare this prime property performance to the mainstream market, there have been only eight quarters of positive annual growth to date, following seven quarters of decline when impacted by the tightening of lending restrictions.”
“Contributing to Sydney’s prime values, the super-prime market is performing exceptionally well with many suburban records being achieved in excess of $10 million, especially for those homes located close to the water.”
All five Australian major cities performed well in the prestige market in the year to Q3 2021 - ranking in the top 23 from 45 global cities in the Prime Global Cities Index Q3, averaging 9.3% annual growth.
Kate Everett-Allen, Knight Frank Head of International Residential Research, said, “The pandemic-driven boom has been most evident in 2021 as markets reopened, accrued savings spurred on house moves or second home purchases, and homeowners reflected on where they wanted to be and how they wanted to live. Overall, we expect prime price growth to moderate in 2022, but there will be some exceptions.”
“Since the start of the pandemic, we’ve monitored cities’ performance closely, and the story is an evolving one. The narrative has pivoted from ‘cities are dead’ to ‘smaller, secondary cities are king’ and now ‘metropolises are back’.”
“Behemoths like New York and London look to be awakening from their slumber with the pace of prime sales quickening and annual prime price growth moving into positive territory for the first time in three and six years respectively,” she added.