Sydney prime residential price growth continues: Savills

Kelcie Sellers, analyst at Savills World Research, said the return of international travel is likely to provide an increased supply of buyers for prime properties

Sydney prime residential price growth continues: Savills
Sydney prime residential price growth continues: Savills

The resilience of the world’s residential property markets has continued in the first half of 2021 says global real estate advisor, Savills.

Across the 30 cities in the Savills World Cities Index, capital values grew by an average of 3.9% over the six months to June 2021.

It was the fastest rate since December 2016.

With 4.9 percent half yearly growth Sydney was the only Australian city on the list, sitting in 8th place between Moscow and Seoul.
 
Sustained record-low-interest rates, improved buyer confidence, increased transactions at higher price points, and economic stimulus measures have all contributed to the strong property price growth.
 
The strong growth follows a more subdued period as values from June 2018 to December 2020 only grew an average of 0.7% as a result of global uncertainty and tax and policy changes in many cities. 

The low growth was exacerbated by the pandemic in 2020, which had the additional effect of lockdowns shuttering property markets in many cities.

Sydney prime residential price growth continues: Savills
 
Not all cities performed equally over the past six months, the report noted.

Over 70% of the locations had positive capital value growth for the first half of the year. 

"The cities which posted negative capital value growth are unified in their historical reliance on international buyers in their prime markets, a segment which has been severely limited by travel restrictions," Kelcie Sellers, analyst, Savills World Research, said.

The highest capital value growth can be found in the Chinese cities with six month growth figures between 7.9% in Guangzhou and 13.7% in Shanghai. 

Price rises in China have accelerated in 2021 despite tightening of financing and local policy changes in an attempt to cool the markets. 
 
In the United States, Los Angeles and Miami lead with growth above 9% in the first half of 2021 with Miami benefiting from domestic migration to the city as a result of increased remote working, favourable local taxes, an influx of tech and finance companies, and the enhanced buying power from low-interest rates.

In New York, prices have declined for over four years because of oversupplied markets but signs point to prices stabilising this year as transactions increase.
 
“The return of international travel is likely to provide an increased supply of buyers for prime properties.
 
“Sustained economic recovery globally is forecast to further support buyer confidence and boost demand. 

Though a degree of pandemic-related uncertainty remains, the prime residential sector is likely to remain strong through the rest of the year,” Sellers said.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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