The strongest housing markets in the Global Property Guide’s survey during 2020 included New Zealand (+16.77%), Sri Lanka (+15.47%), Puerto Rico (+14.59%), Slovak Republic (+14.28%), and Turkey (+13.7%), using inflation-adjusted figures.
37 of the world’s housing markets for which figures are available showed stronger upward momentum during 2020, while only 16 housing markets showed weaker momentum, according to Global Property Guide’s research. Momentum is a measure of the “change in the change”; simply put, momentum has increased if a property market has risen faster this year than last (or fallen less).
During 2020, house price increases were accelerating in many countries in Europe, Asia-Pacific, and the U.S. and Canada.
Real house prices (i.e., prices adjusted for inflation) rose in 40 out of the 53 world’s housing markets which have so far published housing statistics. The more upbeat nominal figures, more familiar to the public, showed house price rises in 45 countries, and declines in only 8 countries.
After an abrupt pause in the first half of 2020 due to pandemic-related restrictions, transaction volumes in many countries recovered strongly in the second half of the year.
New demand was coming from more properties being bought outside cities. Demand had been boosted by record low interest rates, as well as quantitative easing.
House prices have accelerated specially in developed countries, where mortgage finance is important.
Strong house price surges have taken place in European countries, such as Slovak Republic, Turkey, Germany, Estonia, Sweden, and Russia.
Asia-Pacific is gaining momentum, with notable performances from New Zealand, Sri Lanka, South Korea, Taiwan, Japan and China.
The North American housing market is booming. The Federal Housing Finance Agency’s seasonally-adjusted purchase-only U.S. house price index rose by 9.42% y-o-y in 2020 (inflation-adjusted), the biggest y-o-y increase ever recorded, amidst strong demand and construction activity buoyed by very low interest rates and massive government stimulus spending. All this, despite the U.S. being the new epicentre of the coronavirus outbreak. Likewise in Canada, house prices in the country’s eleven major cities rose by 8.57% during 2020, in contrast to a y-o-y fall of 0.29% in the previous year.
The biggest y-o-y house price declines were seen in Makati CBD, Philippines (-16.11%), Egypt (-14.38%), Montenegro (-10.45%), Phnom Penh, Cambodia (-8.8%), and Qatar (-4.78), again using inflation-adjusted figures.
Image: Residential houses at Mount Victoria in Wellington, New Zealand, by dudlajzov / Adobe Stock
