Global residential property prices are rising at their fastest rate in nearly three years according to Knight Frank’s latest House Price Index. 89% of the 56 countries and territories analyzed experienced a price increase last year and they rose by 5.6% on average compared to 5.3% in 2019.
Several emerging markets posted strong growth and Turkey topped the index for the fourth consecutive quarter. Between Q4 2019 and Q4 2020, it experienced a 30% hike in its residential property prices. New Zealand had the second highest growth in home prices at 19%, ahead of Slovakia’s 16%. Residential property is also becoming more expensive in the United States and it came seventh on the list with 10% growth in 2020.
Those trends are not evident across all markets and one region of the world where a gulf is developing is Europe. While Austria (10%), Germany (8%) and France (6%) all saw steady increases in their residential property prices, southern Europe remained relatively stagnant with Italy and Spain experiencing an increase of 1% and a decrease of 2%, respectively. Outside of Europe, the largest dip in prices was seen in India with a 3.6% contraction while prices in Morocco sunk 3.3%.
Knight Frank stated that several factors are fueling residential property price increases across most markets, particularly low interest rates that are resulting in higher demand. Inventory levels are also tight in many markets where sellers are reluctant to market their property until they have identified their future home. Travel bans have also played a role and they have resulted in some domestic buyers reassessing their lifestyle and seeking properties with better home office options and outdoor space.
*Click below to enlarge (charted by Statista)