Australia among top 5 performers globally for House Price Growth

As we head into 2022, there is an expectation that interest rates are likely to rise around the world in response to recent inflation data. That may be true. However, we do not believe this will be enough to stop the gains – in fact, rising rates may indeed add to further gains (as per Turkey). The final quarter of 2021 Global House index shows Australia has moved up from 7th in the Q2 to 5th in Q4. Australia’s residential market has the biggest price growth in the world with a further 8% tipped to the end of 2021.

Knight Frank Australia head of residential research Michelle Ciesielski said Australia’s residential property market was a stable “safe haven”. Looking at the Global House Price Index table below for Q4 of 2021, Australian property increased an average of 17.5% in real terms, which is adjusted for inflation. Globally house prices grew 10.3% on average in 2021, but Knight Frank is forecasting a more muted growth rate for 2022.

According to Ciesielski, “We’ve now reached a point where the Australian housing market has become fatigued after riding significant growth in values on the back of an economic rebound, and is now grappling again with global uncertainty, a natural disaster and an upcoming federal election,”

Ciesielski said despite the economic headwinds the imbalance between demand and supply of residential stock in Australia will boost price growth in 2022 of up to 8 per cent by the end of the year. The top five performers globally for both nominal and real term price growth were Turkey, New Zealand, Czech Republic, Slovakia and Australia.