City high-end housing markets bounce back

Prime property updates

Global surge in urban super-prime sales

What does the chart show?
The market for the most expensive homes in some of the world’s biggest cities bounced back in the first six months of 2021, after vaccine programmes began to be rolled out across the globe and restrictions eased on international travel. 

Knight Frank, the estate agent, said there had been 785 “super-prime” sales — defined as those valued at US$10m or more — in the first half of the year. This was more than double the number in the same period in 2020, when the coronavirus crisis led to social distancing restrictions that effectively closed the housing market. It was also 52 per cent higher than in the same period in 2019, before the pandemic struck.

Where is the resurgence focused and what’s driving it? 
New York was the most active city for the ultra-wealthy seeking high-end properties, in marked contrast to the exodus that occurred last year during lockdown, when many families sat out the crisis in places such as Florida and the Hamptons.

Knight Frank said there were 202 sales in the city above $10m in the first six months of 2021, a rise of 36 per cent on the same period in 2019. The city’s reopening — and its relatively high rate of vaccination of adults at 70 per cent — spurred the recovery in its high-end housing market, the agent said. It added that apartments were back in demand after falling back during the crisis. Apartments accounted for 86 per cent of all super-prime sales in the city in the first half of the year, up from 77 per cent in 2020.

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Los Angeles was another hotspot, with the number of super-prime sales rising 185 per cent on 2019 figures, driven by its availability of the type of housing favoured under the extraordinary conditions of lockdown. “There are opportunities for large spacious homes, inside and outside, and weather that allows for year-round use of outside space,” Knight Frank said.

Singapore bounced back sharply, with 119 US$10m-plus sales in 2021, up from 29 in 2019 and 28 in 2020, a surge the researchers said had been underlined by the city state’s cautious handling of the pandemic.

London is also on the list. Hasn’t its high-end property market suffered in the pandemic?
Yes — particularly as travel bans put a lid on the opportunities for international buyers to visit and purchase homes in sought-after areas such as Mayfair, Knightsbridge and Chelsea. However a pick-up in sales in the past few months would suggest it is on the way back. 

Another agent, Savills, last week published data showing there had been 237 sales in London above £5m in the first six months of 2021, 61 per cent higher than the same period in 2019. This was driven by domestic buyers and international buyers already resident in London seeking bigger homes and gardens in the wake of lockdown, it said.

“The absence of overseas buyers has held back the recovery of parts of the prime London market, most notably the highest value central postcodes, where prices remain about 20 per cent below peak,” said Frances Clacy, Savills residential research analyst. “London-based buyers clearly called the bottom of the market late last year and have been able to enjoy transacting with relatively low levels of competition.” 

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However, she added that the advantage enjoyed by domestic buyers was likely to be shortlived, since international purchasers would return as travel corridors reopened. The UK government on Wednesday said fully vaccinated travellers from the US and EU countries would not have to quarantine on entry to the UK from August 2. 



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