Global Residential Cities Price Index Dips in Q2, Amid COVID Outbreak
Based on international property consultant Knight Frank’s latest Global Residential Cities Index, the annual rate of price growth worldwide declined marginally from 3.6% to 3.4% between March and June of 2020.
Not surprising, given most housing markets were stopped in their tracks by the pandemic in the second quarter with transactions unable to complete. Nevertheless, the index is still recording growth on a par with that seen in 2018 and 2019.
Knight Frank says there are some indications of weakening performance. Firstly, the percentage of cities seeing prices fall year-on-year increased from 15% to 19% between March and June this year. Secondly, the number of cities recording double-digit prices rises on an annual basis declined from 20 to 16 over the same three-month period.
Turkish cities now occupy the top three rankings. The fundamentals of strong demand and constrained supply explain the level of growth along with a weakening lira. The population of Turkey has increased by 12 million to 83 million in the last decade alone according to the World Bank. The weak lira – now close to 7.6 to the US dollar – is also boosting demand from gulf countries, reports Knight Frank.
European cities now account for two of the top ten rankings, down from four a year ago with Luxembourg the strongest performer, up 14%.
Italian cities registered price growth of 3% on average, up from 0% a year earlier, with Milan leading the way with annual growth of 11%.
Two of the three Swedish cities we track, where no formal lockdown was enforced, have seen their rate of growth increase since March. Stockholm saw annual price growth rise from 5% to 6% and Gothenburg from 2% to 4%.
Knight Frank says Phoenix leads the US cities we track with price growth of 9%. On average, US cities have seen their annual rate of growth drop from 4.2% in March to 3.9% in June.