Globally, house prices are rising at their fastest rate since Q4 2006
Knight Frank’s Global House Price Index, a tool for benchmarking average prices across 56 countries and territories, increased 7.3% in the year to March 2021.
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Turkey leads the rankings for annual price growth for the fifth consecutive quarter, but strip out inflation and real prices are rising at around 16% per annum.
Aside from Turkey the top ten is largely comprised of developed nations, including New Zealand (22%), the US (13%), Sweden (13%), Austria (12%) and Canada (11%).
With twelve countries recording double-digit price growth in the year to Q1 2021 it is no surprise that talk of postpandemic housing bubbles is increasing but authorities are already starting to take action.
Cooling measures return
Since January 2021, authorities in China, New Zealand, and Ireland have intervened with a range of measures from tighter lending rules to higher stamp duties for multiple purchases. Canada is also looking closely at a national vacancy tax and China is mulling over a national property tax.
With governments taking action and fiscal stimulus measures set to end later this year in a number of markets, buyer sentiment is likely to be less exuberant, plus, the threat of new variants and stop/ start vaccine roll-outs have the potential to exert further downward pressure on price growth.
It’s not a global boom
Behind the headlines, however, there are several large economies where strong price growth remains elusive and where sales have yet to gain traction – Italy (1.6%), India (-1.6%) and Spain (-1.8%) all recorded lower price growth in Q1 2021 than a year earlier either due to stringent lockdowns, economic concerns or excess supply