Nearly 50% of global housing markets had double-digit annual price growth
Nearly 50% of global housing markets recorded double-digit annual price growth in the 12 months to the third quarter of 2021 (Q3 2021) – and the New Zealand housing market had the third-highest annual price growth among 56 countries, according to property consultancy Knight Frank’s latest Global House Price Index.
The index found that house prices globally continued to rise, with the value of an average home having increased by 9.4% in the 12 months to Q3 2021, up from 9.2% last quarter. It also revealed that 54 of the 56 countries and territories it tracked saw prices rise year-on-year, with Malaysia and Morocco the only countries not part of this trend.
First on the list was Turkey, with a 35.5% annual change in nominal terms in the 12 months to Q3 2021 and 15.9% after adjustment for inflation. It was followed by South Korea, with 26.4% nominal and 23.9% after adjustment for inflation.
New Zealand ranked third with 21.9% nominal and 17.0% after adjustment for inflation. Sweden and Australia were ranked fourth and fifth, respectively, with the former reporting 20.3% nominal and 17.8% after inflation adjustment and the latter reporting 18.9% nominal and 15.9% after inflation adjustment.
Between June and September, 18 countries and territories saw a moderate annual price growth rate, with the top performers since the beginning of the COVID-19 pandemic being New Zealand, the USA, and the UK.
Read more: Red-hot housing market has finally come off the boil, according to mortgage lender
Despite having the third-highest annual house price growth among 56 countries, New Zealand’s housing market seems to be cooling down now, with Bluestone Home Loans’ (Bluestone) New Zealand Property Cycle Indicator revealing a drop in property market activity in the September 2021 quarter after two strong years as the market moved into a moderating stage of the property cycle.
Cameron Bagrie, consultant economist at Bluestone, said the factors that impacted market activity were the recent lockdowns, regulatory changes, shifts in banks’ risk tolerance, and rising interest rates. In addition, lending growth is now easing as it surpasses income growth.
“Some regions continue to be resilient for now – particularly Canterbury – but we’re now seeing more signs of regions moving into a moderating stage of the property cycle, including the key market of Auckland,” Bagrie said.
