Global Appetite to Buy Property Continues, Despite COVID Outbreaks
International property consultant Knight Frank's latest Global Buyer Survey released this week analyzed the impact that Covid-19 had on residential buyers' attitudes to purchasing homes around the world.
The survey, which represents the views of over 900 Knight Frank clients across 49 global markets found that:
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.
Mark Harvey, head of international residential sales at Knight Frank also commented, "Prime buyers in Europe and the U.S. 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 U.S., Singapore, Hong Kong, 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%).