About 31% of ultra-high-net-worth individuals (UHNWIs) in the Middle East are planning on purchasing a new home in 2021, according to Knight Frank’s forthcoming edition of The Wealth Report 2021.
Globally, 26% of UHNWIs are planning to buy a new property in 2021, a sharp increase from the 21% revealed in 2020, the report says.
This demand will help fuel price rises of up to 7% in key markets over the course of the year, it said.
Liam Bailey, Global Head of Research at Knight Frank, said: “The Wealth Report confirms a clear rise in demand for residential property. Demand is especially strong for rural and coastal properties, with access to open space being the most highly desired feature. The pandemic is super-charging demand for locations that offer a surfeit of wellness – think mountains, lakes, and coastal hot-spots. Demand will help fuel price rises of up to 7% for our key markets this year.”
Taimur Khan, Head of Research at Knight Frank Middle East, added: “In the Middle East region 31% of UHNWIs are planning on purchasing a property in 2021. Such demand from Middle Eastern UHNWIs stretches across the world, with the UK, US, Turkey, Spain and the UAE being the top five locations where such purchases are planned.”
Auckland leads Knight Frank’s Prime International Residential Index with price rises of 18% in 2020. New Zealand’s handling of Covid-19, its rapid economic recovery, ultra-low mortgage rates and limited supply of stock were behind the surge.
The index, which tracks the movement of luxury residential prices in 100 cities and second home markets globally for the 12-months to the end of December 2020 also reveals:
• Asian cities occupy the next three rankings: Shenzhen (+13%), Seoul (+12%) and Manila (+10%)
• Australasia (4.9%) and North America (6.3%) were the top-performing regions in 2020. Both regions saw a surge in pent-up demand as lockdowns eased and homeowners re-evaluated their lifestyles
• Perth (+4%) was Australia’s frontrunner and Sydney (+1%) registered its highest volume of prime sales ever in the third quarter of 2020
• Ten of the 11 North American markets tracked in the index sit within the top 20 rankings. Palm Beach was a key super-prime hotspot recording 20 sales above US$20m in 2020, up from 10 in 2019
• 2020 marked a watershed moment for Vancouver. After three years of declining house prices – in part linked to higher taxes – it’s luxury market got a reboot with prices rising by 8%
• The European prime property market was stop-start in 2020. Despite cities leading the results – Zurich (8%), Stockholm (6%) and Amsterdam (6%) – the focus of transactional activity from June onwards was firmly on coastal, rural or alpine resorts. Second home hotspots of Tuscany, Provence and the South of France saw successive bursts of activity each time lockdown rules eased
• In the UK, an eight-week Spring shutdown during the nation’s traditional peak selling season saw London (-4%) playing catch-up over the summer. Once the property market was allowed to resume, a release of pent up demand boosted by a welcome stamp duty holiday buoyed the market
• In the GCC region, weaker economic conditions and historic supply gluts in parts have underpinned prices falls in Doha (-6.0%), Dubai (-5.9%) and Riyadh (-3.3%). Abu Dhabi’s prime market saw prices remain stable over this period.
Taimur Khan, head of research at Knight Frank Middle East, said: “Despite prime prices softening in almost all key markets, demand for prime residential property has remained robust throughout 2020. There are also early indications that we are seeing these markets being to enter new market cycles.
For example, whilst Dubai’s prime residential market saw prices decrease by 5.9% in the year to November 2020, we are beginning to see signs of a recovery in price performance in some prime sub-markets. For example in the six months to December 2020, apartment and villa prices on the Palm Jumeirah increased by 5.1% and 9.4% respectively. Over the same period, villa prices in District One have increased by 3.5%. Other prime markets such as Downtown Dubai and Emirates Hills are also showing similar signs of improvement in market performance. More so, in contrast to the mainstream market, prime transaction volumes increased by 7.9% in 2020 compared to 2019.” –TradeArabia News Service
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