Global real estate markets set to take off this year
Residential real estate markets in major economies will soar this year thanks to huge monetary and fiscal support and in the midst of a recovery from the pandemic, according to Reuters polls, which have shown price risks. biased upward.
Average home selling prices have reached breathtaking levels in 2021 in some countries. This trend is expected to continue, thanks to low mortgage rates, the rapid rollout of vaccines and the easing of restrictions after deep recessions sparked by a pandemic last year.
The global spike in house prices is accompanied by soaring stock markets, which quickly rebounded from a slump due to economic damage from a pandemic and devastating job losses, to focus on a recovery unprecedented and the recovery to come.
Reuters polls of more than 100 real estate market experts carried out May 11-24 showed large improvements in house price forecasts in the United States, Britain, Canada, Australia and Dubai compared to just three months ago, exceeding expected GDP growth and consumer price inflation.
âConsumer confidence has risen sharply due to the success of vaccination programs and survey data suggests the pandemic has prompted more people to look to relocate. Supply shortages indicate upward pressure on prices in the short term, “said Andrew Harvey, senior economist at Nationwide.
Almost 60% of analysts, or 55 of 92, who answered a separate question about real estate markets around the world, said risks to the outlook were skewed upward in the coming year. . The remaining 37 said more on the downside.
The trend in the latest Reuters polls has shown expectations of large gains this year, followed by slower appreciation over the next few years, moderated by increased supply, lower immigration and as affordability becomes a greater constraint.
Although the demand for single and multi-family homes has increased in cities and towns, when asked how the demand for office space will evolve more broadly over the next several years, respondents were divided.
Forty-one of 78 respondents said it would decrease, including five who reported a significant decrease, while the remaining 37 said demand for office space would increase, including two who reported a significant increase.
âThe forced remote working experience of the past few months will lead to a dramatic shift in demand in the office sector, with up to 50% of employees working from home at least once a week,â said Matthew Pointon, Senior real estate economist at Capital Economics.
“Even with a heroic supply response through substantial conversions and demolitions, we expect the vacancy rate to increase dramatically over the next five years and continue to be high in 2030.”
INDIA MISSING BOOM TIMES
House prices in Australia and Canada are expected to rise double digits this year, while in Dubai they are expected to rise for the first time in six years.
The UK housing boom was also expected to continue thanks to continued government support, alongside increased demand for more living space.
Real estate prices in the United States are expected to grow rapidly, increasing at double the rate expected in February, driven by low supply and cushioned by heavy spending by the White House administration and interest rates close to zero.
âUnexpected demand during the pandemic and chronically tight inventories have pushed home prices well above levels guaranteed by underlying fundamentals such as jobs and income,â said Gregory Daco, chief US economist at Oxford Economics.
The outlook for the Indian real estate market is a notable exception to the global trend.
Indian house prices are expected to stagnate this year, hurt by a devastating second wave of the coronavirus that has crushed demand and offset tax breaks and government incentives for real estate developers.
India currently accounts for one in three coronavirus-related deaths reported worldwide each day, according to a Reuters tally. Read more
âNormalcy in mobility and housing would remain muted for the next 18 months. But the broader issue of income and employment also remains muted,â said Ashish Nainan, assistant professor at Saintgits of the Indian market.
“While the first wave brought some relief to the industry, after the second wave buyers would become fence guards for an extended period.”
(Other stories from Reuters housing market surveys 🙂
Our Standards: The Thomson Reuters Trust Principles.