Global Residential Market Outlook
A roundup of the latest data and insight on key global residential markets
3 minutes to read
There are a number of factors we are monitoring which will influence the future performance of the world’s main prime residential markets.
The economic impact from government lockdown and social distancing measures will be critical, but so too will the easing of global travel restrictions and changes in consumer behaviour.
The most recent data from across the Knight Frank global network confirms that the biggest impact of the crisis will be on transactions – although pricing will not be immune from the fallout.
Residential digest
Asia Pacific
In China, we continue to see a slow resumption of normality. Our latest data dashboard confirms that four cities in mainland China, along with Hong Kong, saw an uptick in transactions between 1 and 14 April, with one city, Shenzhen, also reporting a rise in asking prices.
Our latest Global City Watch, which tracks real-time economic indicators, shows traffic congestion in Beijing now sitting above its 2019 level, increasing by 6% in the last week alone, suggesting the city’s workforce and productivity is getting back on track.
Furthermore, the collapse in oil prices at a time when China’s manufacturing industry is finding its feet could be a further boon for the world’s second-largest economy.
That said, there are concerns that the economic fallout in Hong Kong could be deeper and longer lasting as Financial Secretary Paul Chan Mo-po revised his forecasts for the territory this week.
In India, our latest sentiment survey reveals that 60% of stakeholders believe that the current Covid-19 situation will adversely impact the number of new residential developments released into the market. It is hoped that further fiscal and monetary stimulus measures will boost demand and sentiment.
Europe
France and Spain look to be moving in tandem, both naming 11 May as their starting point for easing out of lockdown. Our online viewings data shows an uptick in activity in both markets, along with Italy, since the week commencing 16 March.
Having imposed some of the toughest lockdown measures, Spain announced its four-stage plan this week. From 11 May, restaurants will be allowed to open outside terraces and hotels can resume business provided they stick to a 30% occupancy rate.
France, which has been in lockdown since 17 March, has set out a detailed plan. The phased plan will not be uniform, however, with the areas least impacted by the pandemic likely to see measures relaxed fastest. Restrictions may remain in place in Paris and the east of the country for longer.
New cases in Italy have now been in decline for five weeks, Italy will enter phase two of its Covid plan on 4 May with parks, factories and building sites set to reopen, but schools will not restart classes until September.
As countries across Europe ease restrictions, pressure is mounting on the UK government to publish its blueprint for easing out of the lockdown.
The US & Canada
In the US, President Trump has announced that lockdown measures can be lifted from 1 May but this will be overseen on a state-by-state basis with New York and New Jersey joining forces with five neighbouring states to manage the reopening of their economies.
A look at back at previous crises by our colleague Jonathan Miller highlights the relative resilience of the Manhattan luxury market after 9/11 and the 2008 financial crisis.
We have seen evidence of safe haven flows from emerging markets in the last few weeks into New York and the volatility of equity markets is prompting some HNWIs to rebalance their investment portfolios giving greater weight to property assets.
Data digest
A brief look at the latest price data published for March 2020 shows a mixed picture. Eight of the 13 countries to have released price data show a rise in annual price growth in the first quarter of 2020.
However, most were in Europe, North America or Latin America where Covid-19 cases were in their infancy in March. By comparison, China and Hong Kong saw their rate of annual growth decline, from 6.8% to 5.4% and from 3.4% to 2.0% respectively over this period.
