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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Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Philip Lowe’s comments come amid property industry concerns about pressures on mortgage holders and rising rents
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Leaders in Australia’s property industry are calling on the RBA to hit the pause button on further interest rate rises following yesterday’s announcement to raise the cash rate to 4.1 percent.
CEO of the REINSW, Tim McKibbin, said it was time to let the 12 interest rate rises since May last year take effect.
“The REINSW would like to see the RBA hit pause and allow the 12 rate rises to date work their way through the economy. Property prices have rebounded because of supply and demand. I think that will continue with the rate rise,” said Mr McKibbin.
The Real Estate Institute of Australia today released its Housing Affordability Report for the March 2023 quarter which showed that in NSW, the proportion of family income required to meet the average loan repayments has risen to 55 percent, up from 44.5 percent a year ago.
Chief economist at Ray White, Nerida Conisbee, said while this latest increase would probably not push Australia into a recession, it had major implications for the housing market and the needs of ordinary Australians.
“As more countries head into recession, at this point, it does look like the RBA’s “narrow path” will get us through while taming inflation,” she said.
“In the meantime however, it is creating a headache for renters, buyers and new housing supply that is going to take many years to resolve.
“And every interest rate rise is extending that pain.”
In a speech to guests at Morgan Stanley’s Australia Summit released today, Governor Philip Lowe addressed the RBA board’s ‘narrow path’ approach, navigating continued economic growth while pushing inflation from its current level of 6.8 percent down to a more acceptable level of 2 to 3 percent.
“It is still possible to navigate this path and our ambition is to do so,” Mr Lowe said. “But it is a narrow path and likely to be a bumpy one, with risks on both sides.”
However, he said the alternative is persistent high inflation, which would do the national economy more damage in the longer term.
“If inflation stays high for too long, it will become ingrained in people’s expectations and high inflation will then be self-perpetuating,” he said. “As the historical experiences shows, the inevitable result of this would be even higher interest rates and, at some point, a larger increase in unemployment to get rid of the ingrained inflation.
“The Board’s priority is to do what it can to avoid this.”
While acknowledging that another rate rise would adversely affect many households, Mr Lowe said it was unavoidable if inflation was to be tamed.
“It is certainly true that if the Board had not lifted interest rates as it has done, some households would have avoided, for a short period, the financial pressures that come with higher mortgage rates,” he said.
“But this short-term gain would have been at a much higher medium-term cost. If we had not tightened monetary policy, the cost of living would be higher for longer. This would hurt all Australians and the functioning of our economy and would ultimately require even higher interest rates to bring inflation back down.
“So, as difficult as it is, the rise in interest rates is necessary to bring inflation back to target in a reasonable timeframe.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
