Sharp decline in demand for super prime homes in London

The super prime property market in London has suffered amid the coronavirus pandemic, new research shows. 

In times of crisis, the prime and super-prime echelons of the capital’s property market have appealed to wealthy investors, but the ongoing crisis has clearly had an adverse impact on buyer sentiment and this is particularly evident in areas where there is currently no buyer demand at all. 

Newly released data from Knight Frank has revealed that there has been a 68% drop in the number of super prime property transactions in London during the first half of this year.

The research looks at how 12 key super-prime markets around the world performed in H1 2020 compared to H1 2019 and delves into the number of transactions completed since March 2020 when Covid-19 was officially labelled a pandemic, lockdowns were enforced around the world and international travel ceased.

Total Transaction Volumes

Flora Harley, global residential research at Knight Frank said: “Whilst the number of transactions were down in 11 of the 12 markets analysed, two markets saw sales volumes increase and over half saw the average value of transactions increase.

“Sydney was the standout market with 15 super-prime sales in the first half of 2020 compared to 13 in the first half of 2019, however looking at the period between March and June period there were only six compared to 12 in the same period last year.”

Total Sales Volumes

Despite the falling number of transactions, average sales values were generally higher. Overall, the global average transaction value increased by 15% for the March to June period, at US$20.7m [£17.6m] compared to US$18m [£15.3m] for the same period in 2019.

London saw the largest increase and takes the top spot with an average transaction value of US$38m [£29.4m], compared to US$16.9m [£13.1m] in 2019 – the average in Geneva also jumped, whilst Hong Kong which usually sits in first place, has fallen to third position.

Paddy Dring, head of global prime sales at Knight Frank, commented: “The impact of Covid-19 has been felt across all our international markets with most coming to all but a complete standstill for a number of months as various lockdown measures were put in place globally. Despite this, there has been some very positive activity in the super prime market with significant sales forging ahead. Hong Kong, New York, Los Angeles and London all witnessed a healthy number of sales despite the conditions.

“London has a particularly interesting story to tell, although transaction volumes were down considerably at the US$10m+ level between March and June 2020 compared to 2019 – it has seen the largest increase in average transaction values – up by US$22m [£17m] compared to average value levels seen the previous year.”

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