_The appetite for purchasing property continues

The appetite for purchasing property continues globally with one in four people looking to move house in the next 12 months.

The survey, which represents the views of over 900 Knight Frank clients across 49 markets highlights that:

• Globally, 19% of respondents have moved house since the start of the pandemic. Of the non-movers, 20% are more inclined to move in 2021 as the pandemic continues
• 46% of respondents are more likely to buy a detached home or villa but demand for apartments has increased to 19%, up from 12% in 2020
• There is an increase in demand for larger, more spacious apartments
• The pandemic has sparked a wave of second home demand, with 33% of buyers more likely to purchase a second home as a result of the pandemic, up from 26% in 2020
• In Australasia, almost half of buyer respondents (43%) said they would be willing to pay a premium for a branded residence

Kate Everett-Allen, Head of International Residential Research at Knight Frank said: “Over two-thirds of people expect the value of their current home to increase in the next year with most expecting a rise of between 1% and 9% over the 12-month period. This coincides with Knight Frank’s Prime Global Forecast which highlights that global house prices are, on average likely to increase by 4% in 2021.”  

Further findings from the report reveal that the pandemic has sparked a wave of second home demand. Some 33% of buyers say they are more likely to purchase a second home as a result of Covid-19, up from 26% last year. Of those looking to buy a second home, 23% say the pandemic has influenced where they want to buy and 22% say it has delayed their purchase plans.

Knight Frank’s Head of Residential, Shayne Harris, said of the results and the trends in the Australian market: “Both the results from Knight Frank’s Global Buyer Survey, and the sales results in the Australian market over the last 12-18 months, show the continually increasing appetite of buyers for both primary and secondary homes.

“Whether buying or renting, the COVID-19 pandemic has caused Australians to prioritise space in their apartments and houses, with a willingness to spend big to achieve this. The gap between buyer demand and appropriate property supply is widening, with construction difficulties weakening supply and rising costs creating a highly pressurised buying environment in some instances, often driven by FOMO from buyers.

“Throughout the pandemic, lifestyle has become increasingly more important for Australian buyers, and this has manifested in a focus on location popularity and an increased level of interest in branded residences. It is interesting to note that global respondents in this survey have indicated that city living is back in favour, whereas in Australia we are still seeing a trend towards relocation with a focus on lifestyle location for property as the need to be in the office everyday has been greatly reduced.”

Mark Harvey, Head of International Residential Sales at Knight Frank said: “Prime buyers in Europe and the US will find a markedly different landscape now to 2020. Stock is lower, vendors are less willing to negotiate on price and, after several months of tight travel restrictions, overseas demand is strengthening. Some buyers are willing to take a more watchful approach and wait until the final quarter of the year when they hope vendors will be less intransigent on price. Others are keen to act quickly where they can see compelling value before prices shift higher.

“Two trends stand out in the last few months. Firstly, a growing ambivalence of some buyers when it comes to location, provided they can secure a co-primary home that delivers the lifestyle and enjoyment they feel they’ve missed out on. And, secondly given low savings rates and frothy stock markets, buyers are taking a more defensive stance by rebalancing their portfolios with a greater focus on tangible assets such as property.”

Looking to branded residences, one in three buyers (39%) would be willing to pay a premium for a branded residence according to the survey, a figure that rises to 45% and 43% in Australasia and Asia respectively. Top amongst the key motives for purchasing a branded residence is the service provision and amenities such a development affords. Second comes the development’s high-yielding potential and in third place, the building’s management and maintenance proved an appealing prospect. 

Finally, the report sheds light on the pandemic-induced surge in property purchases by expatriates looking to acquire a base back home. The survey results confirm that the US, Singapore, Hong Kong SAR, the UK and the Philippines were the key locations expatriate respondents were based prior to the pandemic. For those that returned home, a desire to be closer to family (36%) was the biggest motivating factor, followed by an improved quality of life (24%) and a change in employment circumstances (16%).