Buying a home with easy access to modern amenities and a workspace reflects a return to normal life after the upheaval caused by the pandemic.
Given the current trend, Bailey said “major city markets are likely to outperform [other areas] over the next few years.”
Property consultancy Knight Frank estimates that house sales in the Greater London area will grow by 2 percent this year, while sales of luxury country houses (defined as cottages, farmhouses and manor houses that either have extensive grounds or at least one acre of land) will fall by 2 percent. Specifically, this segment refers to the UK residential property market outside London with homes priced above £750,000 ($989,000).
Research from Santander Bank published in June 2021 found that demand for homes outside London had driven up UK-wide property prices by 8 per cent in the year since the coronavirus outbreak. However, demand for homes in the British capital increased by 5.7 per cent over the same period.
In Australia, the current trend can be identified by a surge in new home sales in capital cities and a sharp drop in demand in regional areas, according to data tracked by OpenLot.com.au.
“Last year, housing approvals growth in metropolitan areas was significantly higher than in the regions,” said Qi Chen, co-founder and CEO of Australian New Homes Portal. “There is a shift in gravity back to the big cities. The Covid-era dream of living in a city with trees or the sea has lost its luster. People now want to live as close to the capital as possible, but still have a home.”
For example, in Greater Perth, new homes increased by about a quarter in the financial year from April 2023 to March 2024, while regional Western Australia saw new homes fall by 1.1 per cent, according to data cited by Chen.
In Brisbane, Queensland's capital, new home approvals rose 8.8 per cent, while they fell 9 per cent in regional areas. In Greater Melbourne, new home approvals jumped 2 per cent, although new home approvals in regional Victoria fell more than 13 per cent.
“In Adelaide and Sydney, new home approvals fell in both metropolitan areas, but by less than in regional areas,” Chen said. “In Adelaide, new home approvals fell by 5.6 per cent, much less than the 13.2 per cent fall in regional South Australia. In Sydney, the difference in new home supply between regional areas and the capital was the smallest, at around half a percentage point.”
With buyers now flocking to urban centres, house prices in regional cities “will rise more slowly than in capital cities,” said Juwai IQI co-founder and group managing director Daniel Ho. House prices in capital cities are currently 50 per cent higher than in the regions, he added.
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How Hong Kong's Housing Market Became One of the World's Most Unaffordable
How Hong Kong's Housing Market Became One of the World's Most Unaffordable
Hong Kong is seeing less demand for homes in areas such as Sai Kung in the New Territories, where buyers can get more interior space and better outdoor spaces such as terraces and gardens, according to luxury property agency Habitat Property.
“We have seen a sharp drop in demand for outer locations such as Sai Kung, and this is putting downward pressure on prices,” said Habitat founder and managing director Victoria Allan. “People are choosing to live closer to the centre or on Hong Kong Island as they are happy to go to Thailand for the weekend.”
A comparison of recent house price trends on Hong Kong Island and the New Territories confirms Allan's observations.
House prices on Hong Kong Island fluctuated between a 2.36% drop and a whopping 18% rise in the second quarter of the year compared with the previous three months, the latest data from the Rating and Valuation Department shows. Meanwhile, in the New Territories, house price movements ranged from a 3.59% drop to a 7.1% rise over the same period.
“I think prices in the border areas will remain low and actually continue to decline for some time because there is so much new supply on the market,” Allan said. “The prime and upscale areas of Hong Kong Island… will recover faster as interest rates start to come down and demand picks up.”
Meanwhile, in Singapore, the prospects for improved sales in the luxury property segment, including in the central business district, are based on the narrowing price gap between high-end properties and those in the mass and mid-priced segments, said Alan Chong, executive director of research and consultancy at Savills Singapore.
“Location is critical,” Chong said.