In a year of muted property activity, Australia performed well, posting price gains of 9.1 per cent for the year. The index grew 3.3 per cent over the 12 months to the third quarter of 2014.
“Growth in Sydney’s prime property is forecast at a more sustainable 5 per cent in 2015 after a lift in performance of circa 1 per cent over the past 12 months,” Knight Frank associate director of residential research Michelle Ciesielski said.
Knight Frank expects that Brisbane might follow the trend of the lower eastern seaboard states, and Sydney in particular, and follow into price growth.
“Key market indicators are signifying a strong opportunity for the Brisbane residential market heading into 2015,” Ms Ciesielski said.
“With heat still in the Sydney and Melbourne markets, Brisbane properties have become an attractive and more affordable option for investors,” she said.
When it comes to prime and luxury real estate, however, Sydney and New York are set to be among the world’s best-performing prime residential markets in 2015, according to Knight Frank.
The comparatively strong Australian economy has meant that Australia’s residential housing market is well positioned to take advantage of rising business confidence.
This, along with a weaker Australian dollar, is beginning to attract interest from overseas, including expats.
New York and Sydney’s prime markets are forecast for price growth in 2015 but London is expected to be flat. Paris, Singapore, Hong Kong, Geneva and Dubai are all predicted to drop.
New York once again tops the luxury ranking. Prices across Manhattan are expected to increase by 5 to 10 per cent over 2015.
“Strengthening foreign interest (from Chinese, British, Russian and Latin American buyers) as well as improving economic indicators is behind our positive outlook,” the Knight Frank report said.
“Sydney is also on the radar of foreign buyers but here limited luxury supply is pushing prices higher, we forecast by up to 5 per cent in 2015.”
In contrast, Dubai sits on the bottom of the ranked projections for the coming year, with prices expected to slip by 5 to 10 per cent.
However, that could be tempered by a relatively limited supply and growing appetite from Indian buyers. The report, which used global growth estimates of 3.3 per cent in 2014, 3.7 per cent in 2015 and 3.9 per cent in 2016, pointed to improved global prospects that could awake Europe from its economic and housing slumber.
However, it sounded a warning.
“The euro zone crisis has not been resolved and geopolitical risks are rising, in the Middle East, but also now in Ukraine and parts of West Africa.”
The report said that these risks could potentially have an impact on oil supply and global economic stability.
In addition, it said, they may increase the demand for safe haven assets that was seen in 2009.