Stirring interest in high end

Overseas Property | Prashant Gopal 2 Jan 2020

Rich homebuyers laid low in 2019 as economic uncertainties turned global cities into risky propositions. But don't be surprised to spot the world's wealthiest people beginning to spend money again as home prices in relatively stable economic areas continue to sink into bargain territory.

In a few cities, prices are even set to rise, according to global property consultancy Knight Frank. Paris leads the agency's2020 forecast, with a 7 percent luxury price increase, followed by Miami and Berlin, where luxury units are also relatively affordable and in short supply.

However, political and economic question marks still abound.

And taxes on the rich instituted by cities such as Vancouver, London and New York will continue to weigh on sales, said Kate Everett-Allen, a Knight Frank partner in London. "Most markets will still see prime prices increase but by smaller margins than previously."

New York City prices will fall 3 percent this year, a continuation of last year's trend, said Knight Frank.

And Vancouver's stuck, too. Sellers of pricey properties will likely still be feeling the hangover from the drawback of Chinese buyers and foreign buyer tax measures that were introduced in 2016 to cool runaway prices.

In Hong Kong, the political unrest has hurt the luxury market, but it's still unlikely to crash this year, according to Knight Frank, which projected a 2 percent drop for luxury prices in 2020.

Philip White, president and chief executive officer of Sotheby's International Realty, said buyers are putting purchases on hold and starting to look elsewhere in cities such as in Vancouver, Los Angeles, San Francisco and London. "Real estate buyers look for a stable political system, and they're not finding that right now in Hong Kong."

Central London, where prices fell 3 percent in the 12 months through November, will stabilize slightly as the fate of Brexit becomes clearer, saidTom Bill, Knight Frank's head of London residential research.

Prices are likely to rise by about 1 percent this year, according to Knight Frank's research. "Once the Brexit deal is completed, we forecast rising momentum across all markets," the company's 2020 forecast report said.

Bloomberg

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