Global prime property has had a good year and looks set for another one in 2021. The latest forecast paints a rosy picture across the globe as new trends consolidate in the market. And as the world moves on from the pandemic, new prime property hotspots could emerge in resorts.
Good year for global prime property
Despite the sweeping effects of the pandemic on most sectors, real estate appears to have ridden the storm. According to the latest Prime Global Forecast from Knight Frank, the sector was “largely resilient” in 2020.
The Forecast reveals that in the year to September, the global prime property index went up by 1.6%. Some cities experienced higher price rises, but very few saw price drops.
Market drivers in 2021
The report examines the forces that will be driving global real estate next year. They include two that are direct consequences of the pandemic. Firstly is the shift in lifestyle trends. In many countries, homeowners are keen to move outside the city and to bigger properties.
This change in where and how we live has also affected supply. In many areas of the world, inventory levels are falling fast. For example, in the US there is currently an acute shortage of single-family homes.
Another market driver for global prime property in 2021 will be currency. Knight Frank predicts a strong US dollar next year, giving greenback buyers the edge in some countries. For example, real estate in Brazil will continue to represent good value.
The fourth major factor in the market next year will be the continued low interest rates. In many countries – the US and Brazil, for example – they are already at their lowest ever. Buyers will continue to take advantage of this through 2021.
Movers in 2021
The report found that in 45% of cities sales of prime property were already back at their pre-pandemic levels. 36% of cities reported an “exodus” to the suburbs.
Knight Frank predicts 5% rises in house prices in Cape Town and Shanghai next year, the highest increases for global prime property. A further four cities will see prices go up by 4% in 2021: Auckland, Lisbon, London and Miami.
New trends in 2021
The report also highlights new trends in the market in 2021. All of which have the potential to shift real estate outside the cities themselves.
Demand is increasing in beach and mountain areas offering sun or ski holidays. This could lead to price increases in resorts locations across the globe. Aspen in Colorado is one such example or beach resorts on lesser-known coastlines.
Now the new normal, working from home has led to a surge in mobile professionals, prepared to work from any corner of the world. To attract this workforce, some countries have introduced short-term visas. “Expect more of this,” says Knight Frank.
Second home location
During lockdown, many second homeowners stayed in their holiday home while others could not get there for months at a time. As a result, the two concepts have merged into one. And for many people, a second home must now be within easy distance of their first.
Invest in prime real estate in Brazil in 2021
The Coral in Northeast Brazil ticks all the boxes for the new trends next year. The resort sits in over 1 million square metres of nature on one of the most beautiful and quietest beaches in Céara. Yet Fortaleza Airport is within easy reach.
All property comes spacious with luxury finishes and fittings. All properties have private outdoor areas and offer digital connectivity for working from home. On site, the 5-star resort includes amenities such as a beach club, concierge service and 24-hour security. Construction on a Radisson hotel starts next year.
And finally, the Brazilian Real is currently weak giving buyers in foreign currencies more for their money. With prices starting at just US$40,500 and guaranteed rental returns on some purchases, global prime property has never offered such good investment potential.
Don’t miss the chance to invest in The Coral.
(Source: Knight Frank)