The world's prime residential markets recorded their lowest rate of annual growth since the Global Financial Cross in the second quarter of this year, according to the latest Knight Frank Prime Global Cities Index.

The index, an unweighted average of the change in prime prices across 45 cities, shows prices increased by 0.9 per cent on average in the year to June 2020, down from 2.3 per cent in March in what is the lowest rate since the fourth quarter of 2009.

Europe and Asia were among the regions to experience significant declines in average prime prices throughout the quarter, falling from 2.8 per cent to 0.7 per cent and from 2.5 per cent to 1.1 per cent respectively.

At a glance:

• Knight Frank has released its Prime Global Cities Index for the second quarter of 2020, showing prices increased by 0.9 per cent on average in the year to June 2020, down from 2.3 per cent in March.
• Europe and Asia were among the regions to experience significant declines in average prime prices throughout the quarter, falling from 2.8 per cent to 0.7 per cent and from 2.5 per cent to 1.1 per cent respectively.
• Manila, Tokyo and Seoul are Asia’s top performers year-on-year.

Manila, Tokyo and Seoul were Asia’s top performers year-on-year, with Stockholm, Geneva and Paris leading Europe’s rankings.  

Despite the similarities to the GFC, Knight Frank believes there is unlikely to be large volume of distressed prime sales going forward, as was the case in 2008.

"Lending criteria is tighter, new supply is constrained in several cities, interest rates are low (negative in some markets), plus
furloughing schemes and mortgage holidays are cushioning incomes and repayments," the report reads.

"We expect the index to display muted growth in the second half of 2020 before recovering in 2021."

To download full report and list of top 40 click here

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