Home prices around the world in 2020 logged the highest annual growth since 2018, with roughly nine in 10 countries and territories registering higher values, despite the coronavirus pandemic, according to Knight Frank’s Global House Price Index, released Wednesday.
Residential property prices internationally rose 5.6% on average last year, up from the 5.3% annual growth recorded in 2019, the data showed.
“Low interest rates are fueling demand whilst inventory levels are tight in some markets with sellers reluctant to market their property until they can identify their next home,” Kate Everett-Allen, head of international research at Knight Frank, said in the report. “With travel bans in place, demand is coming from domestic buyers who have reassessed their lifestyles since the pandemic hit, many now seeking home offices and outdoor space.”
Turkey saw a 30% surge in prices last year, leading the index for the fourth consecutive quarter, according to Knight Frank.
New Zealand ranked second, with a year-over-year increase of about 19%, followed by Slovakia, at 16%, and Russia, at 14%, according to the report. The U.S. ranked seventh on the index, with a 10% rise in values, while the U.K. saw a jump in prices of 9%, the 12th highest on the index.
And although much of Europe saw strong price growth in 2020—Austria saw a 10% jump and prices were up 8% in Germany—some southern European countries have not fared as well, according to the index. Prices in Spain slid 2%, while those in Italy saw only a small bump of 1%.
“Strict lockdowns, rising unemployment and a surplus of supply in some areas is leading to weaker price inflation in these Southern European economies,” Ms. Everett-Allen said in the report.
Prices across the Asia-Pacific have not seen the same growth other regions have enjoyed, according to the index. After New Zealand, Japan was the next country in that region on the index, landing in the 27th spot with 5% growth.
Hong Kong and Malaysia both saw prices slip in 2020, 0.1% and 0.8%, respectively, the data showed. Singapore saw an annual price growth of 2.5%.
In the coming year, the roll out of the Covid-19 vaccine will be one of the biggest factors in how housing markets perform, the report said. Governments will also likely reign in the levels of assistance they are offering.
“As policymakers step away from stimulus measures leaving jobs and mortgages less protected, we may see prices weaken but the easing of travel bans may see cross-border transactions start to recover, mitigating some of this impact,” according to Ms. Everett-Allen.
Article Source: Mansion Global