Knight Frank’s latest Global Residential Cities Index is showing the annual rate of home price growth (worldwide) increased between Q2 and Q3 2020, from 4.1% to 4.7%, and 18 international cities saw prices rise by more than 10% year-on year, up from 16 in Q2 2020.
Far from the death of the city this suggests demand has proved resilient during the pandemic with few discounted or distressed sales.
Record low interest rates, huge fiscal stimulus measures as well as a release of pent up demand in Q3 are behind the uptick in price growth, and with travel restrictions during this period buyer demand was largely domestic in nature.
Emerging markets are leading the way with Manila witnessing stellar price growth of 35% year-on-year. Banks in the Philippines are reporting strong demand for high-end projects and an increase in construction and labor costs. In Turkey, the cities of Izmir (28%), Ankara (27%) and Istanbul (26%) occupy second, third and fourth place respectively with St Petersburg (19%) completing the top five.
Despite 20 rounds of cooling measures in the last few years, Seoul continues to register annual price growth of 15%, buoyed by its quick economic rebound and a degree of speculative activity.
Four Canadian cities (Ottawa, Halifax Montreal and Hamilton) now sit in the top 20 with news this month that Canada is considering a countrywide foreign buyer tax. US cities have also risen up the rankings with three making it into the top 20 (Phoenix, Seattle and San Diego).
Some 15% of cities saw prices decline in the year to Q3 2020, with cities in India, Spain and the UAE well represented.
All eyes are now on Q4 data when we may see greater regional variations emerge. Europe may see price growth moderate in Q4 due to recent lockdowns, before a further release of pent up demand in Q1 2021, whilst sales and prices in some parts of Asia may start to gain traction.