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London, New York, Paris, Singapore

Global Prime Housing Forecast

Sydney leads in 2021 with the city expected to see growth of 10%.

Next year, Sydney is also expected to outperform and will share the top spot with London, both cities are expected to see an increase of 7% in 2022.

Miami is predicted to have the second-highest increase this year at 6%, with a further 4% in 2022.

New York should see prices rise by 4% this year, which would be its strongest performance since 2015, followed by a further 3% rise in 2022

What is driving the increase in values?

Government measures have helped protect economies, and cities are now on the rebound.

In addition, the pandemic has inspired many buyers to relocate or expand their holdings. Households accrued a total of over US$5 trillion globally in savings during lockdown, enabling some homeowners to undertake home improvements. Others have opted to relocate, upsize, downsize, or buy a second home/investment property.

The lack of supply in several key cities has been exacerbated as construction rates slowed due to lockdowns and social distancing, putting upward pressure on prices

What lies ahead?

The outlook for prime residential markets will be closely tied to the ease with which cross-border transactions can start to normalise, and whilst virtual viewings and improved technology have assisted in this area, the reality is the resumption of commercial air travel will be key.

Global prime forecast by city

Source: Knight Frank Research
New Development

How to maximise the value of a residential development

In prime and super-prime locations, every inch of saleable floor space matters.

Simon Robinson of MSMR Architects runs us through the principles of space planning – explaining why the size, layout and positioning of units is pivotal to the success of any new development project.

Space planning has well established roots in the commercial sector but in recent years these have migrated and taken hold within the residential market. Although prime projects usually begin with a design approach focused on the exterior of the building, the added value that results from early consideration of a building’s insides is irrefutable.

It is often referred to as ‘interior architecture’. It should not to be confused with interior design which comes later in the process, after key strategic space planning principles have been established, and brings its own added value to a project.

Target Market 

Being alert to the commercial and economic drivers of a development, knowing the characteristics of likely purchasers and understanding the nature of the ‘local market’, all influence design decisions and direction. In prime and super-prime locations, where rates per sqm are high, every inch of saleable floor space matters.

Unit Mix

It may sound obvious, but in order to maximise the value of a development, the interior architect must design the right sized units, and arrange them in the right location within a building.

The Journey

How residents and visitors experience the journey from the street to the apartment front door within a building is a persuasive scene-setter. Considered thresholds between public and private spaces are essential in high value developments where privacy and security are a prerequisite. Informed choices about the sequence of spaces, the views and connections to the outside, the lighting and material finishes – all have the potential to enrich this journey, priming the individual with a sense of wellbeing.

Apartment Layouts

A clearly defined and controlled entrance experience to individual apartments is important. What you see and feel when you open the front door sets the tone. A ‘managed’ view through or across a space to the outside, to natural daylight, to greenery or landscape beyond is the ideal. Where this is not possible, a well-proportioned space can be provided, with a piece of furniture or artwork acting as a focal point.

Market Updates

Monaco is still the world’s most expensive real estate market

Despite the upheavals of 2020 that rocked markets worldwide, Monaco still remains a highly desirable location.

The Monégasque market remains the most expensive location to purchase residential property worldwide, with an average price per square metre of over €47,000, though that figure is down 1.1% from 2019 levels. Hong Kong, the second most expensive location across the globe, saw average prices per square metre fall 3.9% to €39,600 in 2020.

There was a slightly steeper decline in transaction numbers in 2020, down 11% compared to 2019, though this does vary by property size. Large properties including four bedroom-plus apartments and villas saw the steepest falls in transactions, down 38% and 53% respectively. Travel restrictions worldwide have made property purchases by foreigners more difficult, turning Monaco into a primarily domestic market in 2020 and keeping most foreign buyers from making the big-ticket purchases in Monaco that they’re so known for.

This trend can also be seen when examining transactions by price point. Properties priced below €5 million was the most active price point in the Principality, with transactions down only 6%, compared to falls of 39% for properties priced over €10 million. Transactions for properties less than €5 million account for 71% of the total sales in the Principality, so softer declines at this price point result in less steep declines for Monaco overall.

Price changes in the Principality were more consistent across the property sizes. The falls in transactions at higher price points didn’t translate to equally lower prices, showing that buyers who did purchase were still willing to pay pre-pandemic prices. The slight decline in prices in 2020 of 1.1% is not enough to derail the upward trajectory of prices in Monaco, which have grown over 50% in the last decade.

Prime capital values and prime monthly rents per sqm (ranked by capital values)

LocationPrime Capital Values € per sqmPrime monthly rents € per sqm
Monaco€ 47,600€ 89.00
Hong Kong€ 39,600€ 60.00
New York€ 22,200€ 66.00
Tokyo€ 20,400€ 50.00
Geneva€ 19,100n/a
Shanghai€ 17,400€ 50.00
London€ 17,000€ 34.00
Sydney€ 15,900€ 20.00
Paris€ 15,600€ 37.00
Seoul€ 15,600€ 32.00
Shenzhen€ 14,500€ 19.00
Beijing€ 13,900€ 18.00
San Francisco€ 13,700€ 27.00
Singapore€ 13,600€ 25.00
Source: Savills

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