Sydney, where luxury property prices are expected to rise up to 10 per cent during the next 12 months, has been named the world’s leading city in Knight Frank’s 2021 prime forecast.

Knight Frank Australia’s head of residential research Michelle Ciesielski said Sydney’s prime residential market had recorded growth every quarter since March 2013, underpinned by Australia’s ultra-wealthy.

The report has forecast Sydney would hold its top spot in 2022, which, along with London, would experience a 7 per cent year-on-year growth in prime prices.

“[It is] demonstrating the ongoing undersupply of luxury prestige homes being built while our ultra-wealthy Australians purchase luxury property at home instead of abroad,” Ciesielski said.

“Although lockdowns are currently in place, exclusive viewings are custom when buying prestige residential property and in many instances off-market purchases were already taking place with ultra-wealthy Australians who have been grounded on home soil for the past 16 months.

Global prime price forecast by city

^Source: Knight Frank

“The past three consecutive quarters has resulted in the highest number of prime sales transactions on record, so this mounting turnover suggests there is still depth in the market for 2022 especially given Australia’s international borders are likely to remain closed for the foreseeable future.”

More than 1400 prime sales were recorded in Sydney in the first quarter of 2021, which was the highest quarterly figure on record for the city.

Cieselski said Australia’s ultra-wealthy had embraced the low interest rate environment to expand their property portfolios and invest in the stock market.

There have been more than 20 property sales over $20 million in Sydney in the first half of this year, where the median house price is now $1.3 million.