RESIDENTIAL SALES

Global Residential Outlook – 11 December 2020

Key takeaway Knight Frank’s latest Global House Price Index finds the impact of the pandemic on house prices has been mixed with three broad groups emerging. Firstly, markets that registered a sharp uptick in sales and prices in Q3 2020 (New Zealand, the US and UK), secondly those that have seen only a marginal impact on pricing (China, France, Germany) and finally, those countries and territories that have seen annual price growth move into negative territory (Hong Kong, Singapore, Spain).
Written By:
Kate Everett-Allen, Knight Frank
4 minutes to read
Categories: Residential Sales Economics Global

Need to Know:

  • Covid latest: Europe’s second wave is slowing although the stringency of restrictions over Christmas vaies. Germany will extend its partial lockdown to 10 January, Spaniards will be able to meet to celebrate Christmas and New Year in groups of up to 10, whilst Italy has announced travel bans between regions from 20 December until 6 January.
  • The UK administered its first doses of the Pfizerer/BioNTech vaccine this week. Canada and Bahrain are the only other two countries to have so far approved the vaccine.
  • Brexit latest: There is a growing sense of urgency around Brexit negotiations and both parties are said to be working to a new Sunday deadline. Progress has been made on the Irish border but France has warned that it will veto any EU-UK trade deal unless it meets its requirements. The three sticking points are fishing rights, a level playing field in terms of trade and tariffs and how the two parties will resolve disputes going forwards. Separately, the UK has now agreed a trade deal with Singapore adding to the two existing deals with Canada and Japan.
  • From 1 January 2021 UK nationals will be permitted to remain in most EU and EEA countries for up to 90 days in any 180-day period. If they wish to remain longer than this, they will need to apply for permission which will vary country to country.
  • Since 5 December, England has introduced new quarantine exemptions for “high-value” business travellers, performing arts professionals, journalists and certain others, meaning that if they meet certain conditions they will not have to self-isolate on arrival in the country.
  • Plans are afoot for a new $908 billion U.S. pandemic relief package to be passed before Congress breaks for the year at the end of this week.
  • Singapore will host the World Economic Forum in 2021 - only the second time the event has been held outside Switzerland in the last 20 years.


Residential Digest

Europe

  • Tom Bill’s latest Prime London Sales Report confirms that price growth in prime outer London is outpacing central London in the final months of 2020 as demand for space and greenery remains strong after two national lockdowns.
  • Meanwhile prime rents in central London are down 9.1% in the year to October, continuing a trend that started during the first national lockdown in England. Supply has increased due to the addition of short-term lettings properties onto the market, a sector where demand has been curtailed by the pandemic.
  • Chris Druce’s new Jersey Residential Market Insight finds that prices rose 1% over the third quarter of the year, lifting the annual increase to 3%. The average property price of £533,000 was close to the all-time high reached at the end of 2019. There were 380 transactions in the third quarter of 2020, an increase of 111% on the second quarter, when Jersey was in lockdown, and 24% higher than the same period in 2019.

Asia Pacific

  • The new Australian Prime Waterfront Index confirms that properties on the waterfront generate a 69% premium compared to properties inland, up from 63% a year ago. Sydney leads the Australian cities with a 105% premium in Q3 2020 which compares to 95% in Perth and 30% in Melbourne.
  • In Australia, the HomeBuilder scheme has been extended by three months to 31 March 2021 and the price caps for homes in Victoria and New South Wales will be raised to reflect higher property values in those states. HomeBuilder provides eligible owner-occupiers (including first home buyers) with a grant to build a new home or substantially renovate an existing home.
  • Hong Kong saw 2,200 new-build sales and 3,869 existing property sales in November, broadly in line with the previous month. The deteriorating labour market and 6,000+ redundancies at Cathay Pacific, has impacted the rental sector with an uptick in available flats in Tung Chung and Discovery Bay.

North America

  • There is some optimism emerging in the Manhattan sales market. There were 227 contracts for homes priced at $4 million-plus between 1 September and 6 December up from 219 over the same period in 2019. Low mortgage rates, rising equity markets and a growing perception of value are supporting demand.
  • Canada is considering taxing foreign buyers to improve affordability for domestic purchasers. Vancouver and Toronto already have foreign buyer taxes in place but the government is considering a national move.

For further information on any of the datasets or research reports highlighted please contact Kate Everett-Allen