Globally, house prices are rising at their fastest rate since Q4 2006. Knight Frank’s Global House Price Index, a means of benchmarking average prices across 56 countries and territories, increased 7.3% in the year to March 2021.
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 thirteen 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.
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 news headlines, Knight Franks says 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.