Global House Prices Rising at Fastest Pace in 15 Years
13 countries and territories registered double-digit growth in the first quarter.
13 countries and territories registered double-digit growth in the first quarter.
A boom in housing demand during the global pandemic has driven price growth to a 15-year high, according to a report released Wednesday.
The Knight Frank’s Global House Price Index, measuring average home prices across 56 countries and territories, rose 7.3% year over year in the first quarter, the fastest pace since the fourth quarter of 2006.
“A contributory factor to rising house prices globally has been the mass reassessment of housing needs in the wake of the pandemic, whether that’s been buyers seeking home offices, gardens or just to be closer to wide-open spaces,” Kate Everett-Allen, head of international residential research at Knight Frank, told Mansion Global.
“The demands on the home have increased in lockdowns and homeowners have reflected on where and how they want to live, prompting many to relocate or purchase a second home,” she added.
With a 32% year-over-year price increase, Turkey led the rankings for the fifth consecutive quarter. However, stripping out inflation, real house prices rose around 16% annually in the country.
“Turkey’s somewhat of a red herring,” Ms. Everett-Allen said. “Sales declined in 2020 but prices increased due to inflation and the weak Turkish lira. Construction costs are also rising due to tight supply chains.”
A total of 13 countries, primarily developed nations, registered double-digit annual price growth. Those include New Zealand (22%), the U.S. (13%), Sweden (13%), Austria (12%), Canada (10.8%) and the U.K. (10.2%).
“Homeowners in these developed nations have also seen some of the largest rates of accrued savings. For some, this may mean they now have a deposit for their first home, or enable existing homeowners to upgrade,” Ms. Everett-Allen said.
For example, the Bank of England estimates that U.K. householders have amassed some £250 billion (US$354 billion) in savings since the start of the pandemic, she said.
Wary of potential housing bubbles, some countries have adopted market-cooling measures to curb the rapid price growth since January. China, New Zealand and Ireland introduced higher stamp duties for investment properties.
China is also considering a national vacancy tax or property tax, as is Canada.
Home prices in China, excluding Hong Kong, rose 4.3% year over year in the first quarter, while Ireland home prices increased 3.7% during the same period.
However, not all countries experienced a housing boom in the first quarter. Four countries saw their housing prices drop from a year ago, including Malaysia (-0.9%), Morocco (-1.2%), India (-1.6%) and Spain (-1.8%), according to the report.
Reprinted by permission of Mansion Global. Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: June 2, 2021
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After more than a year, prices have finally levelled out in prime central London, while outer London saw a small uptick in high-end prices from the previous quarter
The first quarter of the year brought some long-awaited signs of recovery in London’s luxury housing market, offering the first positive quarterly price growth since September 2022, according to a report from Savills on Wednesday.
After six consecutive quarterly price falls, luxury home prices in central London levelled out in the first three months of the year, with a 0.1% quarterly uptick in prices. The £3 million to £5 million (US$3.79 million to US$6.32 million) market saw a slightly larger increase of 0.3%.
Outer London’s luxury market saw greater quarterly price growth, with home prices up 0.8%, as some stability returned to mortgage costs and lured more buyers back to the market, according to the report.
All of this is evidence that the market is “in early stages of recovery,” according to Lucian Cook, head of residential research at Savills.
“The outlook for the housing market has certainly improved, partly because the mortgage market has recovered more quickly than expected,” Cook said in the report. “With the first rate cut rapidly coming into view and recessionary risks easing, greater stability has returned to the cost of mortgage debt, which has positively impacted domestic prime markets, where many buyers rely on borrowing, most notably in leafy outer prime South and West London, as well as the commuter belt.”
Outside of London, prices across the U.K. saw no quarterly growth heading into the beginning of the spring market, which is expected to bring higher levels of buyer activity in many regions.
Suburban regions saw prices dip just 0.1%, while urban areas—like Edinburgh and Glasgow in Scotland, and Bath and Oxford in England—saw prices increase by 0.6%.
Cook said regional buyers are more likely to be concerned about market uncertainty than London buyers in the lead up to the general election.
“As a result, buyers are still expected to be less committed until the dust has settled,” he said.
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