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London-based property consultancy firm Knight Frank has released its latest Prime Cities Forecast for 2016. The report which assesses the performance of prime city markets and looks are which locations are predicted to see increases or declines in property prices.
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Kate Everett-Allen, Partner, Residential Research at Knight Frank said: “Of the ten cities analysed in our forecast, Sydney is expected to come out on top. However, the pace of price growth is expected to slow from 15 percent year-on-year in 2015 to 10 percent in 2016. “Australia’s economic slowdown, weaker stock market performance in recent months and the introduction of foreign investment fees explain the lower rate of growth in 2016. Only London, Paris, Geneva and Singapore are forecast to see stronger price growth - or a slower rate of decline in 2016 than 2015.” (Getty Images)
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London: A marginal upturn is forecast here, from 1 percent in 2015 to 2 percent in 2016. A rise in transaction costs, political risk around the Mayoral election and on-going affordability concerns explain the muted forecast.
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Paris: The recent terrorist attack will undoubtedly affect buyer sentiment in Paris. The rate of decline in prices is forecast to lessen slightly from -5 percent in 2015 to -3 percent in 2016.
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Monaco: Its status as a private and secure retreat continues to appeal to the world’s wealthy. Prices here are expected to rise by 5 percent in 2016 due to constraints on supply and steady demand.
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Geneva: Switzerland as a whole has been characterised by uncertainty in recent years. However, we expect enquiries to strengthen in 2016. The high stock levels will keep prices from rising over the next 12 – 18 months, hence our forecast of 0 percent growth in 2016, but more stable trading conditions seem likely.
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Hong Kong: Forecast to be the weakest-performing luxury residential market in 2016. A number of new developments are due to come to the market; this new supply coupled with the strengthening HK Dollar will see prime prices soften. (Getty Images)
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Singapore: We forecast the market will see marginal price growth from -3.5 percent in 2015 to -3.3 percent in 2016. The drop in price of luxury properties has presented pockets of investment opportunities.
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New York: In 2015, the demand for New York’s luxury homes cooled from the frenetic pace observed in 2013 and 2014 due to the strength of the US dollar and weaker economic conditions worldwide. We predict there will be growth in New York in 2016 of 5 percent similar to that of 2015.
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Miami: Predicted to see growth decline from 4 percent in 2015 to 2 percent in 2016. The performance of the dollar against key South American currencies and the euro will influence demand/capital flows.