Covid-Driven Home Buying Drives Global Home Prices Up

The ongoing boom in home buying during the Covid-19 pandemic pushed average property prices up 9.2% in the second quarter of the year, according to Knight Frank’s Global House Price Index, released Tuesday.

About one-third of markets, or 18 countries, saw double-digit increases in the second quarter, according to the report, which looked at 55 countries and territories. That’s up from seven at the same time in 2020 and 13 in the first three months of this year.

The index is rising faster than it has since the first quarter of 2005, well before the global financial crisis of 2008-09, according to Knight Frank, although not every region is experiencing a boom.

“A breakdown by developed and developing economies, however, reveals a more nuanced picture,” Kate Everett-Allen, Knight Frank’s head of international residential research, said in the report. “Ten of the world’s developed economies averaged price growth of 12% in the 12 months to June, double that seen in key developing markets (4.7%).”

Turkey remained at the top of the index, registering a 29.2% year-over-year rise in average home prices in the second quarter, the data showed. New Zealand ranked second, where prices jumped nearly 26% and the U.S. had the third strongest growth at 18.6%.

Australia (16.4%), Canada (16%) and Russia (14.4%) also made the top 10, the report found. Indeed, Australia recorded its highest rate of annual price growth since 2003.

“Only two markets saw prices decline in the year to June 2021—India and Spain,” Ms. Everett-Allen said. “This is the lowest proportion of markets registering a decline in prices since the Global House Price Index commenced in 2008.”

Spain saw a 0.9% year-over-year fall in average prices in the second quarter, the index showed. In India, they were down 0.5% in the same time period.

Despite the overall gains, some markets may be close to peaking, according to Knight Frank.

“In the U.S., mortgage applications have dipped and the share of households thinking now is a good time to buy hit a decade low of 28% in June,” Ms. Everett-Allen continued in the report. “The prospect of interest rate rises in markets such as New Zealand, the U.S. and the U.K. is also likely to weigh on buyer sentiment in the medium term. But conversely, recent tighter restrictions in South East Asia, New Zealand and Australia may yet spark renewed activity as lockdowns shine a light on homes and lifestyles.”

There are 10 local council areas scattered along the East Coast of Australia that offer both affordability and solid fundamentals for sustainable future growth, according to the research team at residential property network, PRD. The areas have been selected based on five criterion. They are affordability – defined as a median house price below $600,000, rising house values, strong rental yields to encourage investment, a strong pipeline of residential, commercial and infrastructure projects to facilitate local economic development, and low unemployment.

Here are Australia’s 10 most affordable regional property markets with great future potential.

Mackay, QLD

Mackay is a tropical coastal area located in north Queensland. It’s known for its closeconnection to the Great Barrier Reef. The median house price is $462,750, up 8.9 percent in 2023. Mackay attracts a lot of interstate migrants and is home to more than 120,000 people. It has a healthy economy with an unemployment rate of 3.7 percent and $1.7 billion worth of projects due to commence this year.

Toowoomba, QLD

The Toowoomba median house price was up 10.9 percent in 2023.

Toowoomba is located west of Brisbane and is known for its Victorian buildings, street artand surrounding national parks. The median house price is $560,000, up 10.9 percent in 2023. The city has a population of more than 180,000. The unemployment rate is 4 percentand there is $6.1 billion in projects commencing in 2024.

Townsville, QLD

Townsville is a coastal city in north-eastern Queensland. The median house price is $420,000, up 5 percent in 2023. It is home to more than 200,000 people. Unemployment is very low at 2.5 percent and there is $3.2 billion of projects commencing this year.

Dubbo, NSW

Dubbo is located west of Newcastle in the Orana Region and is home to the Western Plains Zoo. The median house price is $530,000, up 11.6 percent in 2023. The population has exploded in recent years to more than 56,000 people. The unemployment rate is just 2.2percent and the economy is thriving. There is a pipeline of $4.7 billion in projects commencing this year.

Tamworth, NSW

Located in north-east NSW, Tamworth is known for its popular annual Country Music Festival. It’s also the largest retail centre for the New England and Northwest Slopes regions. The median house price is $490,000, up 14 percent in 2023. With a population of more than 65,000 people, the economy is strong with unemployment of just 2 percent and $112.4million worth of projects commencing this year.

Griffith, NSW

Located west of Sydney and northwest of Canberra, Griffith is known for its prime produce production and wine cultivation. The median house price is $531,000, up 2.1 percent in 2023. Griffith’s population is about 27,000 people. The city boasts high economic resilience with a 2 percent unemployment rate and $258.7 million in projects in the pipeline.

Ballarat, VIC

Ballarat is a 1.5–hour drive west of Melbourne. It’s popular with city commuters who move here for housing affordability and a relaxed lifestyle with easy access to the city via train. The median house price is $570,000, down 4.2 percent in 2023 but up 92.9 percent over the past decade. The city has the third highest population in Victoria at about 118,000. Ballarat has an unemployment rate of 3 percent and a total projects pipeline worth $2.3 billion for 2024.

Shepparton, VIC

Shepparton is a rural area about two hours north of Melbourne. It is popularly referred to as ‘the food bowl of Australia’. The median house price is $475,000, up 4.4 percent in 2023. The population is about 70,000. The unemployment rate is just 2 percent and there is $1.8 billion in projects for 2024.

Wodonga, VIC

Wodonga is located on the border of NSW on the southern side of the Murray River. It is approximately 320km from Melbourne and 345km from Canberra. The median house price is $567,250, up 4.7 percent in 2023. With a population of about 44,000, the city’s jobless rate is 3 percent and there is $388.2 million in development set to commence in 2024, primarily new infrastructure.

Burnie, TAS

Burnie is a bustling port city located in Emu Bay in Tasmania’s north-west. Overlooking beaches and parklands, the area is known for its rich agriculture and mining projects. The median house price is $435,000, up 3.6 percent. Despite a rising population, the unemployment rate is falling and is currently 5.6 percent. In 2024, Burnie’s project pipeline is valued at approximately $1.6 billion. A significant portion is commercial development, primarily renewable energy projects.