According to a report out this week, many rich home buyers laid low in 2019, as economic uncertainties turned purchasing in some cities into risky propositions. But don’t be surprised in 2020 to spot the world’s wealthiest people beginning to spend again as home prices in highly-desired areas stabilize—and even start to rise.
The global property consultancy firm, Knight Frank, sees “activity and prices increasing in some prime cities, but by smaller margins than in the past.”
Los Angeles’ sweet spot is in the $2,000,000 to $10,000,000 range, where Knight Frank predicts a 2% rise in sales prices in 2020. Despite some 9-figure sales in 2019, demand was “weak overall” for the highest of high-priced digs, says the report, and does not see that trend changing. The report cited “a more bullish outlook on homes priced below $10M.”
Paris leads the firm’s 2020 forecast for growth, with a 7% increase in luxury sales prices, followed by Miami (on the rebound to a 5% increase over 2019) and Berlin (4%), where luxury homes are in short supply. London’s outlook is almost flat, with a 1% increase expected in 2020, but that’s good news from their 3% drop last year.
The forecast is not glittering for everyone. Vancouver’s high-end sales figures are expected to drop by 5% in 2020. New York may drop 3% due to a glut of inventory in the luxury space: To sell all the newly built condos in Manhattan at the current sales pace, it would take nine years. Knight Frank also sees a slight drop in Hong Kong’s market (2%), in part due to political unrest and trade wars.