Australia makes top 5 for global house price growth

According to Shayne Harris, Knight Frank Australia’s partner and head of residential: “It is interesting to see Australia take out the fifth position globally for the growth in house prices in Q3 of 2021 – the last time we were in a top five position was at the end of 2015, prior to tightened lending restrictions being implemented.”

Globally, prices rose 9.4 per cent on average across the 56 countries and territories covered by the index, with 96 per cent of nations showing positive year-on-year increases, Knight Frank revealed.

Turkey retained its position on the top spot, recording 35.5 per cent growth over a 12-month period to September 2021.

South Korea took over New Zealand at second place, showing a 26.4 per cent increase as the latter slid to third place at 21.9 per cent over the period.

Sweden moved up one rank higher at fourth place (20.3 per cent), and, as mentioned earlier, Australia rounded out the top five.

While the United States had previously resided in the top five, it was pushed out – coming in at sixth place with a growth of 18.7 per cent.  

Unprecedented growth and outlook

Crunching the numbers, Mr Harris has weighed in on the impact of the pandemic on our housing prices, explaining that from 2015 to 2020, the average yearly price growth was 4.4 per cent, rising to 9.8 per cent after the pandemic began.

Moreover, he highlighted the property market’s eight consecutive quarters of positive yearly growth as of Q3 2021, which will likely continue to rev up given that house stocks are low and loan rates are at historic lows.

Still, Mr Harris acknowledged that the housing boom may slow down as prices approach a tipping point for affordability “perhaps by as much as 10 per cent (from 18 per cent in 2021 to 8 per cent in 2022)”.

Also, as overseas travel restarts and some aspects of pre-COVID life return in 2022, he concluded that we could expect Australians to be impacted by further lending restrictions, a rise in house listings, and changing concerns about how they spend their cash.