Worldwide, Urban Home Values Are Outperforming
Worldwide, metro areas saw an average price growth of 9.8% in the second quarter.
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Worldwide, metro areas saw an average price growth of 9.8% in the second quarter, outpacing the 9.2% average growth registered across 55 countries and territories, according to Knight Frank’s Global Cities Index, released Monday.
About 38% of the 150 cities tracked in the report registered a rise in prices of 10% or more year over year, the data showed.
“Predictions of ‘the death of the city’ now seem a distant memory,” Kate Everett-Allen, Knight Frank’s head of international residential research, said in the report.
Halifax, in Nova Scotia, saw the biggest growth, with prices 30.8% higher in the second quarter than they were in the same time period in 2020. Izmir, Turkey, and Seoul, South Korea, tied for the No. 2 spot with annual price growth of 30%, followed by Phoenix, with 29.3%, and Moscow (28.8%).
Of the 57 cities that saw a double-digit price growth, only one was in mainland China— Guangzhou, which had an 11.4% jump in the second quarter, compared to the same time last year, the report found.
“Two years ago, six Chinese mainland cities fell into this bracket,” Ms. Everett-Allen continued. “The scale of the divergence in U.S. and Chinese mainland house prices is significant. We track 15 cities in both markets and on average those on the Chinese mainland saw prices rise by 5.6% over the 12-month period whilst U.S. cities saw prices jump by 19.6%.”
Eleven cities registered negative price growth, with Venice, Italy, seeing the biggest slip, 6.3%, the data showed. Kolkata, India, and Dubai were also at the bottom of the list, with prices down 6.3% and 5.2%, respectively.
However, Ms. Everett-Allen noted that the boom could be coming to an end.
“After 18 months of inertia, governments with heated housing markets are formulating their policy responses,” she said, noting that interest rates have already risen in Norway and New Zealand, with the U.S. and the U.K. set to follow suit. “We expect the index rankings to look very different in 12 or even six months’ time.”
Reprinted by permission of Mansion Global. Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: October 4, 2021.
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Ray White’s chief economist outlines her predictions for housing market trends in 2024
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Ray White’s chief economist, Nerida Conisbee says property price growth will continue next year and mortgage holders will need to “survive until 2025” amid expectations of higher interest rates for longer.
Ms Conisbee said strong population growth and a housing supply shortage combatted the impact of rising interest rates in 2023, leading to unusually strong price growth during a rate hiking cycle. The latest CoreLogic data shows home values have increased by more than 10 percent in the year to date in Sydney, Brisbane and Perth. Among the regional markets, price growth has been strongest in regional South Australia with 8.6 percent growth and regional Queensland at 6.9 percent growth.
“As interest rates head close to peak, it is expected that price growth will continue. At this point, housing supply remains extremely low and many people that would be new home buyers are being pushed into the established market,” Ms Conisbee said. “Big jumps in rents are pushing more first home buyers into the market and population growth is continuing to be strong.”
Ms Conisbee said interest rates will be higher for longer due to sticky inflation. “… we are unlikely to see a rate cut until late 2024 or early 2025. This means mortgage holders need to survive until 2025, paying far more on their home loans than they did two years ago.”
Buyers in coastal areas currently have a window of opportunity to take advantage of softer prices, Ms Conisbee said. “Look out for beach house bargains over summer but you need to move quick. In many beachside holiday destinations, we saw a sharp rise in properties for sale and a corresponding fall in prices. This was driven by many pandemic driven holiday home purchases coming back on to the market.”
3 key housing market trends for 2024
Here are three of Ms Conisbee’s predictions for the key housing market trends of 2024.
Luxury apartment market to soar
Ms Conisbee said the types of apartments being built have changed dramatically amid more people choosing to live in apartments longer-term and Australia’s ageing population downsizing. “Demand is increasing for much larger, higher quality, more expensive developments. This has resulted in the most expensive apartments in Australia seeing price increases more than double those of an average priced apartment. This year, fewer apartments being built, growing population and a desire to live in some of Australia’s most sought-after inner urban areas will lead to a boom in luxury apartment demand.”
Homes to become even greener
The rising costs of energy and the health impacts of heat are two new factors driving interest in green homes, Ms Conisbee said. “Having a greener home utilising solar and batteries makes it cheaper to run air conditioning, heaters and pool pumps. We are heading into a particularly hot summer and having homes that are difficult to cool down makes them far more dangerous for the elderly and very young.”
More people living alone
For some time now, long-term social changes such as delayed marriage and an ageing population have led to more people living alone. However, Ms Conisbee points out that the pandemic also showed that many people prefer to live alone for lifestyle reasons. “Shorter term, the pandemic has shown that given the chance, many people prefer to live alone with a record increase in single-person households during the time. This trend may influence housing preferences, with a potential rise in demand for smaller dwellings and properties catering to individuals rather than traditional family units.”
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