GLOBAL HOUSE PRICE INDEX
KNIGHT FRANK LATEST RESEARCH REPORT ON GLOBAL HOUSE PRICE INDEX Q4 2020 HIGHLIGHTS THAT 89% OF COUNTRIES AND TERRITORIES SAW PRICES INCREASE IN 2020, WITH SEVERAL EMERGING MARKETS PERFORMING STRONGLY, INCLUDING TURKEY, WHICH LEADS THE INDEX FOR THE FOURTH CONSECUTIVE QUARTER.
TURKEY The Country with the Highest Rate of Annual Price Growth in the Year to Q4 2020
NEW ZEALAND Asia Pacific’s Top-Performing Country With 19% Annual Price Growth
INDIA At -3.6%, The Weakest performing Country in the Year to Q4 2020
Globally, residential prices are rising at their fastest rate in nearly three years. Prices increased by 5.6% on average in 2020, up from 5.3% in 2019. Several markets including New Zealand (19%), Russia (14%) the US (10%), Canada and the UK (both 9%) accelerated up the rankings in the last three months.
Low interest rates are fuelling demand whilst inventory levels are tight in some markets with sellers reluctant to market their property until they can identify their next home. 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.
But not all markets are on the up, Europe is one world region where a gulf is emerging. Austria (10%), Germany (8%) and France (6%) are moving ahead of Italy (1%) and Spain (-2%). Strict lockdowns, rising unemployment and a surplus of supply in some areas is leading to weaker price inflation in these Southern European economies.
The speed with which the vaccine is rolled out and economies reopen will directly affect the performance of housing markets in 2021. 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.
ASIA PACIFIC’S PERFORMANCE
Asia Pacific’s performance remains surprisingly anaemic given its relatively efficient handling of the pandemic. Although New Zealand sits in second place, the region’s next highest ranking is Japan (5%) in 27th place. Housing demand and hence price growth remains city-focused not countrywide in Asia. Hong Kong and Malaysia both saw annual price growth slip into negative territory and even Singapore’s rate of growth was muted at 2.5%.
India has moved down 13 spots in the latest global home price index finish last at 56th rank in the quarter ending December 2020. Against its 43rd rank in Q4 2019, India saw a decline of 3.6% year-on-year (YoY) in home prices, leading to the drop in global position.