4 Aussie cities among the biggest winners in pandemic price gains
Four Australian cities have been recognised as some of the biggest winners in a global trend of pandemic-induced property price gains.
While global economies continue to take hits from the COVID-19 pandemic, the unprecedented scale of impact has generated a significant response from central banks, policymakers and businesses – with government-funded bailouts across the world’s top cities now valued at $17 trillion.
New analysis by Juwai IQI has shown that this has correlated to “significant home price gains” among three-quarters of the world’s global cities.
In fact, of the 21 global cities examined, 17 had significant positive changes in prices during the first year to 18 months of the pandemic, with an additional three showing minimal growth at less than 1 per cent year-on-year.
“The pandemic is undoubtedly both a tragedy and a manifold crisis, but for those who own residential property, it has also been a financial boon,” Juwai IQI co-founder and group executive chairman Georg Chmiel said.
Among the top 21 were Australia’s own Sydney, Perth, Brisbane and Melbourne, with each reporting positive price growth.
Sydney led the pack in eighth spot with a 12 per cent increase in prices one year to 18 months into the pandemic, or a total value boost of $103,271.
Perth followed in ninth place with growth of 9.7 per cent, Brisbane in 11th place with 8.2 per cent and Melbourne in 14th place with 6.1 per cent.
“Only a limited number of suburbs [in these Australian cities] that have suffered from a lack of inbound students and immigration have bucked the rising trend,” Mr Chmiel revealed.
According to him, historically cheap loans – with mortgage rates averaging 4 per cent in 2020 from 8 per cent in 2007 – ultimately pushed prices up across these Australian property markets.
But the growth is not over yet, with Mr Chmiel predicting further growth will occur on the back of pent-up demand, the return of students and an impending recovery of transaction levels.
“That rapid price growth attracts buyers eager for a safe investment and afraid of missing out on an opportunity,” Mr Chmiel said.
“Many buyers have not purchased during the pandemic, and some will make those transactions in relatively short order when borders reopen… When students begin returning in large numbers, a portion of them will be buying homes as well.
“The Australian market is already strong despite the lack of migration, and further upward price pressure will likely result as inbound migration resumes,” he added.
Montreal in Canada topped the overall list of housing market booms as a result of the COVID pandemic, with a value gain of 38.9 per cent or $111,261 per property.
Other top 10 cities included Los Angeles (United States), Auckland (New Zealand), Toronto (Canada), Manchester (England), Vancouver (Canada), Shenzhen (China) and Lisbon (Portugal).
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