KUALA LUMPUR (Aug 10): The impact of the Covid-19 pandemic on prime residential values in cities around the world has resulted in a fall of 0.5% for capital values and 1.1% for rental values in the first half of 2020 (1H20), according to Savills Prime Index: World Cities (August 2020) report, which tracks the performance of 28 cities in Asia Pacific, Middle East, Europe and America in 1H20.

“Global uncertainty had been weighing on prime residential markets in 2019, with modest falls of 0.3% recorded in the six months to December 2019. Combined, the annual average price movement turned negative for the first time since 2009, down 0.8% for the year to June 2020,” it said.

According to the Savills report, Kuala Lumpur appears resilient as the government recently announced positive stimulus package incentives targeted at the residential property market. “Kuala Lumpur and Cape Town are the best value cities in the index, and the only cities where prime values are under US$300 per square foot,” it revealed.

“The markets which have held up best in the first half of 2020 are generally characterised by higher levels of domestic demand and tight supply,” it continued.  

These factors are particularly prevalent in a number of European cities in the index resulting in a positive average price movement of 0.4% for the region over the first half of the year, according to the Savills report. By contrast, prices on average fell by 0.6% and 1.5% in Asia Pacific and North America respectively over the same period.

Albeit prices plunging since June 2019, Hong Kong remains the most expensive city in the world for prime residential property, with values 78% above second ranked New York, and 99% above third ranked Tokyo as of June 2020, the report said.

Seoul and Moscow recorded the strongest price rises in 1H20, with an increase of 5.5%. Meanwhile, based on the price movements across the global index, it appears that houses outperform apartments.

“Apartments experienced average capital values falls of 0.7% over the first half of 2020, while houses, which are on average over twice the size of the apartments in the same city, maintained a positive growth of 0.3%,” the report said.

Prime rental markets, which typically have a higher share of international and corporate tenants, have suffered as demand has dipped by 1.1% as a result of the pandemic, the report said. “While owners may hold onto their properties during a crisis if they do not need to sell, landlords are more likely to lower rental values in order to keep their property occupied, in turn realising price falls,” it added.

As for the future outlook, prime residential city markets tend to prove more resilient than the wider mainstream market, although much still depends on the economic situation which is just materialising in a lot of cities, the report said.

“Looking forward, we expect some cities to outperform others. Over the second half of 2020, we’re forecasting Amsterdam, Lisbon, Seoul and Moscow to see the strongest growth,” it concluded.

Stay safe. Keep updated on the latest news at www.EdgeProp.my 

Click here for more property stories

Click here to see residential properties for sale in Kuala Lumpur.


  1. Ex-LTAT chairman Mohd Anwar appointed as Country Heights chairman, succeeding Lee Kim Yew
  2. S P Setia Foundation spreads festive joy at old folks’ home
  3. Probe into structural damage near Bandaraya LRT Station to be completed in two weeks — Prasarana