Knight Frank has released its latest House Price Index, which found that global residential property prices are rising at their fastest rate in nearly three years. The company analyzed prices in 56 countries and territories with 89 percent recording an increase. In 2020, average global house price rose 5.6 percent compared to 5.3 percent in 2019.
Several emerging markets posted strong growth with Turkey topping the index for the fourth consecutive quarter. Turkish residential real estate prices climbed 30 percent between the last quarter of 2019 and the last quarter of 2020. The second largest increase was seen in New Zealand at 19 percent while Slovakia came third with 16 percent. The U.S. is also continuing to see steady growth in its house prices and it came seventh on the list with 10 percent growth in 2020.
Some regions are bucking that trend and India recorded the biggest contraction in residential property prices at 3.6 percent. Morocco came second with a 3.3 percent decline. In Europe, a gulf is developing. Austria (10 percent), Germany (8 percent) and France (6 percent) all saw steady increases while southern Europe remained largely stagnant. On Italy, prices climbed 1 percent while Spain saw a decrease of 2 percent.
Several factors are driving higher residential property price increases and Knight Frank states that low interest rates are playing a role and resulting in higher demand. Inventory levels are also low in some markets where sellers are waiting to acquire their future home before marketing their property. The pandemic and travel bans are playing a role. They have seen some domestic buyers change their lifestyles and seek properties with better home office options and more outdoor space.