Prime residential prices performed better than expected in 2020. The 100 locations covered by PIRI 100 recorded average price rises of 1.9%, up from 1.8% in 2019. In Asia-Pacific, 14 out of 23 prime markets recorded price growth, highlighting the resilience of prices in the region. Auckland leads the index with average prices ending the year 18% higher. New Zealand’s handling of the COVID-19 crisis, its rapid economic recovery, ultra-low mortgage rates and a limited supply of quality stock were behind this surge. However, the prices are expected to normalize as government-supported policies slowly tighten to maintain a healthy market. The low borrowing costs and the improved vaccine optimism seen towards the end of 2020 were the main drivers that aided some of the prime residential markets in Asia-Pacific through the pandemic storm. Cities in the Asia-Pacific region occupy 5 of 10 top spots in the PIRI 100 ranking, reinforcing their firm market fundamentals that allowed them to rebound at unexpected rates. Particularly in the Chinese Mainland markets, property sales volumes across 30 major Chinese cities had returned to the average daily levels observed in 2019.
Australasia was one of the top performing regions, averaging an annual growth of 4.9%, due to the surge of pent-up demand as lockdown eased and homeowners re-evaluated their lifestyles. Perth (+4%) was Australia’s frontrunner, and Sydney (+1%) registered its highest volume of prime sales ever in Q3 of 2020. Grounded by travel bans, the desire to live in green open space that enables a better work-life balance has never been greater. Wellness, wellbeing and family have been at the forefront for many homebuyers in Australia and New Zealand who have been looking within their country to upgrade their main residence or purchase a holiday home closer to home; Expats have been returning home and luxury buyers are also looking to upgrade their main residence or invest in a secondary residence as a result of the bullish stock market. As Singapore continues to be an oasis for investments due to the stable political environment as well as the extensive measures implemented to mitigate any recurrences of infections. The demand for luxury homes in the city-state is projected to grow in 2021 as investible properties remain at comparatively affordable price points, and this is expected to strengthen foreign buyers’ confidence in the market, which could translate into greater sales of prime non-landed residential units once the COVID-19 vaccine distribution proves to be successful and travel restrictions ease.