Global house prices defy pandemic

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HOUSE prices across the world are rising at their fastest pace since 2006 and in Australia, Perth, Sydney and Canberra are leading the way.

Australia has ranked 18th in Knight Frank’s latest Global Housing Price Index for the first quarter with a year-on-year change of 8.3%, while Turkey topped the list for the fifth quarter in a row, with a 32.0% increase.

With most of the top 10 being comprised of nations from the global north, New Zealand came in second, with a 22.1% increase, followed by Luxembourg with 16.6%, Slovakia with 15.5% and the United State rounding out the top five with a 13.2% rise, which was its highest rate of annual growth since 2005.

“With twelve countries recording double-digit price growth in the year to Q1 2021 it is no surprise that talk of post-pandemic housing bubbles is increasing but authorities are already starting to take action,” read Knight Frank’s report.

Over the last six months however, Australia recorded an 8.7% increase, which is the fourth fastest rate globally, with house prices nearing the highs of 2017.

This year, China, New Zealand and Ireland have seen measures introduced to steady the housing bubble, with measures such as tighter lending rules and higher stamp duties for multiple purchases.

While in Canada, which ranked eleventh with an 11% increase, authorities are considering implementing a national vacancy tax.

The implementation of such measures and taxes, as well as COVID-19 fiscal stimulus measures coming to an end, are likely to contain buyer sentiments.

“Plus, the threat of new variants and stop/ start vaccine roll-outs have the potential to exert further downward pressure on price growth,” added the report.

Some large economies however saw decreases in sales prices over the year, with Italy and India both seeing falls of 1.6% and Spain reporting decreases of 1.8%, these declines were likely due to extreme COVID-19 conditions, strict lockdowns, economic turbulence or an excess in supply.

Overall, the average change in prices across the 56 ranked countries and territories was a 7.3% increase, with 13 countries in total recording a double-digit price growth over 12 months.

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