_Melbourne and Sydney top performers in Australia on Global Residential Cities Index

The Index tracks the movement in mainstream residential prices across 150 cities worldwide using official statistics.

Overall the Knight Frank Global Residential Cities Index increased by 4.3% in the 12 months to March; its highest annual rate of growth since Q3 2017.

Victoria’s capital came in at number 10 on the global list of 150 cities ranked by annual price growth from Q1 2019 to Q1 2020, with growth of 12.9%, while Sydney was ranked 14 (11.6% growth), followed by Hobart at 22 (9.4%), with all three cities recording growth more than double the average.

Canberra was next at 97 (2.4%), Adelaide at 113 (1.3%), Brisbane at 116 (1%), Perth at 129 (-0.5%) and Darwin at 149 (-7%).

Knight Frank’s Head of Residential Research, Michelle Ciesielski said of the 150 cities tracked, 85% saw prices increase over the year to March.

But she noted the report was backward looking, covering the period up to March 31 when COVID-19 was at its peak in parts of Asia but had yet to take its toll on large parts of Europe, North or South America.

“However we expect sales volumes to feel the impact of COVID-19 more than prices with employment protection schemes and mortgage holidays in many advanced economies, including Australia, likely to reduce the number of distressed sales and hence the likelihood of price falls.

“While the index’s overall performance may not drop significantly, we do expect the city rankings to look very different in six to 12 months’ time with those markets that have been effective in containing the pandemic, and where lockdowns were short-lived, most likely to show more resilience.

“In China, for instance, there has been a noticeable slowdown in the first quarter of 2020, with average price growth reaching just 0.4%, the lowest average quarterly rate of growth for the 15 cities since Q1 2008.”

Knight Frank’s Head of Residential in Australia, Shayne Harris said the Global Residential Cities Index was compiled at the end of March 2020 following six months of solid performance across most Australian cities.

“Pent-up demand was evident following the federal election, a return to responsible, not restricted lending and lowered mortgage lending rates,” he said.

“Post lockdown, the major Australian cities are experiencing reasonably good auction clearance rates given we’re one month into winter. The shallow number of auctions being held are keeping the discount in property values at bay.

“A momentum in sales transactions at an untraditional time of year is now required to carry through to spring to provide an injection to the unavoidable slowing local economy as a result of COVID-19.

“The economy is likely to perform better than first anticipated, although the speed of recovery in 2021 is dependent on the outcome of several significant economic stimuli expected to be eased for the last quarter of 2020.”

Manila led the annual rankings for the second consecutive quarter with price growth of 22% in the year to March 2020.

Aside from Manila, Seoul and Melbourne are Asia Pacific’s top performers, both with annual growth of 13%.

Budapest continues to lead European cities with growth of 16%. Zagreb and Warsaw make up the trio of Central and Eastern European cities in the top ten.

Australian cities - ranked by annual % change (Q1 2019 - Q1 2020)

This follows the recent Knight Frank Global House Price Index, with Australia ranking 10th. 

For further information please contact:

Michelle Ciesielski
Partner, Head of Residential Research 
+61 2 9036 6659
Michelle.Ciesielski@au.knightfrank.com