Lisbon, Sydney, and Moscow are expected to buck a wider prime slowdown
The high-end real estate markets in Lisbon, Sydney, and Moscow look poised to defy the wider slowdown blighting cities globally this year, according to a report Thursday from Savills.
Each of the three cities is expected to log prime property price growth between 6% and 7.9% in 2020, sustained by a combination of low-interest rates and increased demand, the estate agency said.
Across all of the 23 cities that Savills analyzed for its World Cities Prime Residential Index, prime properties are predicted to rise by 1.8% in value on average in 2020, an improved outlook from last year when growth averaged just 0.1%.
“Uncertainty impacted the global property sector through 2019 and the prime residential sector was no exception,” Sophie Chick, head of Savills World Research, said in the report. “While the outlook for 2020 is generally more positive, price growth in prime residential markets is still expected to be modest across many global cities.”
Beyond uncertainty, local factors, including tax changes and government policy are often the most significant driver of values, and the largest growth will be seen in cities “where supply is not keeping pace with demand,” Ms. Chick said.
In Lisbon, the discrepancy between supply and demand in the real estate market will be a key driver of value growth, as well as a considerable amount of international investment.
In Moscow, a primarily domestic market, growth is being driven by a recovering Russian economy and a developing mortgage market, according to the report.
Price growth in Sydney looks set to be buoyed by lower interest rates, increasing immigration, and increases in demand. But, the market will remain sensitive to global uncertainty and price rises could be reactive to any fluctuations in the market, Savills said.
On the other end of the chart, prime property values are set to decline most significantly in Dubai and Hong Kong.
In Dubai, the prime real estate market is expected to dip between 2% and 3.9% compared to 2019, due to oversupply.
In Hong Kong, political unrest and the U.S.-China trade war will continue to affect high-end home prices, which are expected to fall between 6% and 7.9%, according to Savills.
Read the original article here.