As the world emerges from the pandemic, the global property market is poised for steady growth, with Berlin and Miami leading the way. That is the verdict of the World Cities Prime Residential Forecasts for 2022 from Savills.
Overall, prime residential prices are expected to rise steadily at an average of 4.3% as the world finds ways to live with the pandemic. The index assessed the prospects of 30 major cities. The forecast for this year represents the fastest projected growth in five years, with highlights that remain confident despite an increasingly uncertain economic outlook.
In the report, Paul Torstevin, head of Global Research at Savills, said: “Despite the threat of market cooling measures, such as rising interest rates, 2022 looks on course to continue the positive trend of 2021.”
Savill’s optimistic assertions for 2022 come on the back of a better than expected 2021 in which prime property prices rose by 6.9% over the year. Miami was top of the tree, with 21.3% growth, whilst Los Angeles was not far behind with 19.7%. Miami will continue to be a standout performer as the city keeps experiencing an economic renaissance. People are migrating into the sunshine state from all over the States, with many leading tech entrepreneurs choosing to up sticks from Silicon Valley.
2022 should see some stabilization, but growth should still be a healthy 10% over the year.
Berlin will be the star of Europe, matching Miami’s 10% rise driven by a booming economy, strong demand and limited housing supply. At the other end of the scale, Paris and Hong Kong are likely to be the worst performers with prices expected to remain flat. Hong Kong, in particular, is facing political and economic headwinds with growing concern about the government’s new national security law.
The picture is as optimistic as it has been for some time. However, there are some headwinds. COVID-19 cases are on the rise again in many parts of the world, although widespread vaccinations are helping to control the number of seriously ill people. The world seems determined to live with the pandemic, with plans to open up markets rolling up.
Meanwhile, rising interest rates and inflation rates are also impacting confidence, with property becoming less affordable for many people across the country. Despite this, the property sector has proved to be remarkably resilient in the past, and the analysts at Savills are confident it will prove equally resilient over the next 12 months.
Although they predict the market to flatten out slightly, they are still confident it can continue the positive trends of 2021 into 2022. High demand and limited supply – especially at the top end of the market, will continue to drive need as the global property market continues to defy gravity.
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