Australian property market prices increased from 16.4 per cent in Q2 2021 to 18.9 per cent in Q3 2021, as reported by the latest Knight Frank Global House Price Index. This helped the country rank fifth globally in the third quarter of 2021.
The top spot was retained by Turkey with a 35.5 per cent increase, second place was taken over by South Korea showing a 26.4 per cent increase while New Zealand slides to third place with a 21.9 per cent increase in the third quarter.
Sweden took fourth place at 20.3 per cent higher prices and Australia rounded up at fifth position with an 18.9 per cent increase. Both Sweden and Australia pushed out the United States from the top five, which was recorded at 18.7 per cent.
Noticeably, the last time the Australian property market was in the top-five position was at the end of 2015 — right before the tight lending restrictions were implemented.
Talking about the global housing price index, the prices rose by 9.4 per cent on average across 56 countries. Amongst all the countries, 96 per cent of nations have shown a positive year on year increase.
The impact of the COVID-19 pandemic on the housing process has been dramatic. From 2015 to 2022 until the pandemic happened, the average yearly price growth was 4.4 per cent which jumped to more than double i.e. 9.8 per cent after the first wave of the pandemic.
Moreover, as the housing stocks are low and loan rates are also at historic lows, the property market’s positive quarter on quarter growth will likely continue to stay active.
On the flip side of things, the housing boom might slow down by as much as 10 per cent as prices have approached a tipping point because of affordability constraints. The change could be from 18 per cent in 2021 to 8 per cent in 2022.
Once the overseas travel resume and aspects of pre-COVID life restart, the housing prices are expected to show a downward slope. The impact of lending restrictions, a rise in house listings and a change in expenditure patterns of Australians could be the major reasons for the same.
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