About 33% of the world’s regions have seen double-digit home price increases.
No Decrease in COVID-Inspired Home Buying in Q2 2021
The COVID-inspired home buying boom in 2020 continued into Q2 2021. The result? Average property prices around the world increased +9.2% in Q2, according to the just released Knight Frank Global House Price Index.
One third of the 55 countries and territories analyzed by Knight Frank for this report, or 18 countries, experienced double-digit home price increases. Compared with the seven countries in Q2 2020 and 13 countries in Q1 2021 that experienced double-digit property price increases, Q2 2021’s double-digit price increases in 18 countries are worth noting.
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Developed Economies Experienced Price Increases 2 X Rate of Developing Economies
Kate Everett-Allen, head of international residential research with Knight Frank, said, “A breakdown by developed and developing economies…reveals a more nuanced picture. Ten of the world’s developed economies averaged price growth of +12% in the twelve months to June, double that seen in key developing markets, or 4.7%.
Take a look at the economies at the top of the Q2 2021 Knight Frank Global House Price Index:
- Turkey – +29.2%
- New Zealand – + nearly 26%
- United States – +18.6%
- Australia – +16.4% – highest annual price growth since 2003
- Canada – +16%
- Russia – +14.4%
Everett-Allen said, “Only two markets saw prices decline in the year to June 2021 – India and Spain. This is the lowest proportion of markets registering a decline in prices since the Global House Price Index commenced in 2008.”
Spain’s residential prices dropped -0.9% y/y in average prices during Q2 and India’s prices were down -0.5%.
Markets May Be Close to Peaking
Even though overall average price gains were strong during Q2 2021, Knight Frank cautioned that some markets may be peaking.
“In the US, mortgage applications have dipped and the share of households thinking now is a good time to buy hit a decade low of 28% in June,” said Everett-Allen. Continuing on, Everett-Allen said, “The prospect of interest rate rises in markets such as New Zealand, the US and the UK is also likely to weigh on buyer sentiment in the medium term. But conversely, recent tighter restrictions in Southeast Asia, New Zealand and Australia may yet spark renewed activity as lockdowns shine a light on homes and lifestyles.”
Thanks to Knight Frank and MansionGlobal.