Real estate worldwide continues to outperform other sectors. The latest Knight Frank Global House Price Index shows an overall increase of 7.3% in the year. This was the fastest rate of growth in global property prices for 14 years. Furthermore, 13 of the 56 countries included in the Index registered double-digit rises.
Highest hike since Q4 2006
Despite lockdowns and travel restrictions, global property fared well in 2020 and continues to do so in 2021. The Global House Price Index for the first quarter recorded a rise of 7.3% in the year. The increase is the highest since Q4 2006.
Few of the 56 countries in the Index saw property prices fall and the biggest decrease was less than 2%. On the contrary, all signs point to a booming market and several countries have introduced cooling measures.
Turkey and New Zealand highest rises in global property prices
At the top of the table for Q1 2021 is Turkey. Here, house prices went up by 32% in the year to March. However, once the figure takes inflation into account, it falls by half, to 16%.
New Zealand, a regular at the top of global property price hikes, saw real estate values go up by 22.1% in the year. Luxembourg and Slovakia, with increases of 16.6% and 15.5% respectively, stood in third and fourth places.
In the US, currently one of the world’s busiest real estate markets, house prices rose by 13.2% in the year to March. Knight Frank points out that this is the highest rise since December 2005. In addition, house prices in Florida saw even higher increases.
Slight drops in four countries
Just four countries registered a fall in house prices in the first quarter of this year. And all decreases were less than 2%, indicating the general health in global property.
Real estate in Spain saw the biggest drop with a 1.8% decrease. India registered a 1.6% drop in prices and Moroccan property fell by 1.2%.
Quarterly results
2021 started well for global property prices with moderate increases almost across the board. None of the 56 countries recorded a double-digit rise and just 2 saw values drop.
Lithuanian property experienced the highest rise (9.1%) between January and March. Turkey featured again with an uptick of 6.8%. Property in Jersey was not far behind with a 5.7% increase.
Cooling measures
The dramatic rise in global property prices has prompted several countries to introduce measures to cool the market. These include tighter lending criteria and higher taxes.
Canada, where prices rose by 10.8% in the year to March, is considering a national vacancy tax. This would be levied on residential real estate in Canada owned by non-resident foreigners. The annual tax would be 1% and for vacant (empty) properties.
Brazil property prices rise
The Global House Price Index includes Brazil where property prices went up by 4% in the year to March. The figure reflects the country’s buoyant real estate market where demand for principal and second homes has risen significantly since the declaration of the pandemic.
Mortgage lending figures reflect the increase in demand, particularly in Northeast Brazil. For example, in Ceará, loans went up by 248% in Q1 this year, making the state one of the hottest markets in the country.
(Source: Knight Frank)
