Sydney is set to see the strongest prime residential price growth in 2016, rising by 10% year-on-year according to Knight Frank’s Prime Cities Forecast. The report which assesses the performance of prime city markets in 2016 also predicts that three cities are expected to see a decline in prime property prices; Hong Kong (-5%), Singapore (-3%) and Paris (-3%) with Hong Kong overtaking Singapore as the weakest-performing luxury residential market in 2016.

Kate Everett-Allen, partner, residential research at Knight Frank comments: “Of the ten cities analysed in our forecast, Sydney is expected to come out on top. However, the pace of price growth is expected to slow from 15% year-on-year in 2015 to 10% in 2016. Australia’s economic slowdown, weaker stock market performance in recent months and the introduction of foreign investment fees explain the lower rate of growth in 2016. Only London, Paris, Geneva and Singapore are forecast to see stronger price growth - or a slower rate of decline in 2016 than 2015.”

For most cities, low income growth and a slowing domestic economy are considered the lowest risks to luxury markets the firm added.