Cities across the Savills Prime Index: World Cities are forecast to see average capital value growth of 1.8%. This is a marginal increase from 2019, which was the lowest increase since 2009, but still well below the peak increase of 9.3% in June 2013. Nevertheless, there are markets that are expected to defy this trend. Lisbon, Sydney and Moscow are projected to be the best performers as a combination of growing demand and low interest rates drive growth in these markets.

Uncertainty impacted the global property sector through 2019 and the prime residential sector was no exception. This uncertainty is expected to continue through the coming year. However, a range of factors are also at play in each city’s prime market and local issues, such as government policy and tax changes, are often significant drivers.

Globally, one of the key drivers of the market in cities where values are expected to fall is a supply and demand imbalance, including New York, Miami, Dubai and Kuala Lumpur. Hong Kong and Mumbai are the other two cities on the list, both of which are being affected by local politics and economies.

Europe: Moscow and Lisbon forecast to be top performers in the region

Moscow and Lisbon are forecast to be the region’s strongest performers in 2020, as their prime markets continue to mature. Paris and Amsterdam are also expected to see strong price growth. Berlin has been the strongest performer in recent years and investors will be waiting to see if the rental cap comes into force. If it does not come into effect, prices are forecast to rise but at a slower rate

North America: Marginal price increases expected in San Francisco and Los Angeles

Performance in US cities has been subdued by national tax changes and oversupply in some key markets. In addition, the prime market in New York is also adjusting to higher mansion tax rates. Small price falls are expected to continue in New York and Miami over the coming year, but prices are expected to marginally increase in San Francisco and Los Angeles.

Asia-Pacific: Sydney predicted to have the largest growth in the region

Uncertainty is forecast to continue to impact prime residential markets through 2020. Sydney is predicted to lead the region, with growth supported by lower interest rates, increasing immigration, and continued increases in demand. However, the market remains sensitive to global uncertainty and price rises could be reactive to fluctuations in the market. Ongoing bush fires may also be a near-term mitigating factor as they start to impact on national GDP growth. In mainland China, cities are forecast to see price growth, but at rates well below the double digit annual growth seen between 2013 and 2017. The continuation of the financial de-risking campaign has resulted in an over-abundance of caution in these markets.

_{Read the articles within Savills Prime Index: World Cities below.}