Luxury residential markets across the world are likely to be hit due to COVID-19 outbreak with prices set to drop in most of the major cities including Mumbai which may see a decline of 5 per cent this year, according to property consultant Knight Frank.
In its 'Prime Global Residential Forecast' report, Knight Frank said that as many as 16 cities out of 20 major markets globally could witness decline in housing prices.
"Prime residential market of Mumbai is expected to see a price fall of 5 per cent in the year 2020. For the year 2021, Mumbai's prime residential market is expected to witness a price decline of 3 per cent," the consultant said in a statement.
Prices will fall in a range of 0-5 per cent acrossBerlin, Cape Town, Geneva, London, Los Angeles, Madrid, Melbourne, Miami, New York, Paris and Sydney.
The rates will fall by 5 per cent across Buenos Aires, Mumbai, Hong Kong, Singapore and Vancouver.
Lisbon, Monaco, Vienna and Shanghai are the only four global prime residential markets set to see price growth.
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"There were positive signs in several markets globally that prime prices would rise throughout 2020 but unsurprisingly COVID-19 has put a halt to that," said Liam Bailey, global head of research at Knight Frank.
"Of the 20 cities Knight Frank has analysed, 16 of these will see prime price declines in 2020, with only a handful avoiding a fall into negative territory either because of historic supply shortages or because transactions were able to continue during lockdown and these measures are already being eased," Bailey added.
Knight Frank India Chairman and Managing Director Shishir Baijal said the impact of COVID- 19 is far reaching for most global markets which is reflected in the outlook for the prime residential segments.
"India's key markets will also be faced with the uncertainty mostly due to a significant erosion of confidence amongst buyers across spectrum," he said.
However, Baijal said this also presents a ray of hope for serious buyers with adequate liquidity to enter the real estate segment in India and across the world as values would be attractive.
Knight Frank also released its 'Prime Global Cities Index Q1 (Jan-March) 2020'.
Bengaluru's prime residential market performed better than Mumbai and Delhi, and ranked 27th with 1.4 per cent annual price change for the period Q1 2019 Q1 2020.
Delhi is at 32nd position with 0.4 per cent annual price change and Mumbai at 33rd with 0.1 per cent annual change.