REAL ESTATE PRICES WORLDWIDE

Minh Hoàng
April 27, 2021

Last time, real estate prices in a series of countries skyrocketed. Canada is far ahead of other countries in terms of house price growth, while China has struggled to cool down the market.

– According to The Economist, while getting less attention than the stock and crypto markets, real estate has been an equally prominent market for more than a year. Many rich countries are seeing a spike in housing prices despite the effects of the Covid-19 pandemic.

– Similar to the stock market, house prices are supported by the monetary loosening policies of the governments of many countries. Along with that, falling interest rates also make real estate investment more attractive because returns from risky assets decline.

– Besides, there are other economic policies such as income support package, debt rescheduling to help unemployed workers not having to sell houses. In addition, when office workers work from home more, they will want a comfortable and comfortable space.

Wealthy countries are seeing skyrocketing housing prices. Photo: Reuters.

AMERICA:

– According to the Wall Street Journal, the US may be experiencing the biggest housing boom in decades. In February 2021, housing prices in southern California (California, USA) hit a record high. Customers scrambled to buy, while the number of houses for sale was not much.

– According to data from real estate firm DQNews, the median home selling price in six southern California counties increased 15% from a year earlier to $ 619,750. As of February 2020, sales soared to 17.6%.

– Demand to buy a home exploded when borrowing costs hit historic bottoms. The blockade orders for the Covid-19 translation have also made many people want to move to larger homes. Another factor is that Millennials (people born between 1980 and 1995) are entering home buying age.

– However, the data shows the supply is not keeping up with demand. According to Redfin, from February 8 to March 7, the number of new homes being launched in Los Angeles is only 4% higher than the same period last year..

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Supply did not keep up with demand pushed US housing prices soaring. Photo: Getty Images.

– More homeowners are increasingly afraid to sell their homes, according to chief economist Daryl Fairweather of real estate broker Redfin. They don’t want to buy another home when the market is tough. Some borrow more from banks at low interest rates.

– Some wealthy homeowners are also opting to buy a home that is further away from work, but keeping the old one. Meanwhile, rising wood prices make it harder for new home projects to start. “The new construction cannot keep up with demand,” commented Mr. Fairweather.

– In Los Angeles, the average selling price increased 14.3% to $ 708,500 in February, while sales increased 19.1%. Average selling price in Orange County increased 9.6% to a record 820,000 USD, sales also climbed 13%.

– In San Diego, average selling prices rose 14.6% to a record $ 672,750, while home sales rose 13.8%. Meanwhile, the average selling price and sales at Ventura climbed 13% and 23.9% respectively.

Canada

– One country that has been ahead of others in terms of house price growth is Canada. According to housing data collected by the Federal Reserve Bank of Dallas, nominal home prices in Canada rose at an annual rate of about 16% in the fourth quarter of 2020 compared to the previous quarter, outpacing the US, UK and elsewhere. other.

– As of the fourth quarter of 2020, housing accounted for 9.3% of Canada’s GDP, up from 7.5% in 2019 and 6.6% from a decade ago.

– John Pasalis, president of the real estate brokerage Toronto Realosophy Realty, said that it is necessary to “set alarm bells” about the real estate bubble in the suburbs around Toronto. In these regions, prices have increased by more than 30% in just eight months.

– Another “hot” area is the capital Ottawa. House prices have risen about 25% in a year, creating unprecedented bidding battles.

– “The expectations for this market are crazy,” said David Gourlay. Mr. Gourlay just sold a townhouse in November 2020 for nearly double the price he bought seven years ago. Currently, Mr. Gourlay lives in a detached house in western Ottawa with his wife, daughter, newborn son and a dog.

– “You have to decide how much more money you want to pay off your original price,” he says.

Singapore

– Singapore is also keeping up with the strong rise of the global real estate market. In Singapore, 23 government subsidized apartments were sold for at least SGD 1 million ($ 743,000) in February, according to data from real estate portal SRX.

– In the first two months of 2021, 36 units were sold in the above price bracket, an increase of 350% from a year earlier. Homes built by the Singaporean government are often located in prime locations, such as near Orchard Road shopping mall.

– After Singapore lifted the quarantine requirement in June 2020, home prices in the country quickly recovered thanks to low interest rates. According to SRX Property, a large two-storey apartment in Toh Yi Drive that is a public house (built by the Singapore government) was sold at a record high price of SGD 1.21 million in February.

– The data showed resale public housing prices were up 1.4% in February from a month earlier and 8.3% from a year ago. However, they are still below their 2013 highs.

– Singapore public housing is only available to Singaporean citizens. Owners can only sell apartments after staying at least 5 years, avoiding surfing the property for a profit.

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Singapore is also keeping up with the strong rise of the global real estate market. Photo: Reuters.

– According to Leonard Tay, Head of Research at Knight Frank Singapore, public apartments for sale for more than SGD 1 million are usually located in or near prime locations such as the city’s financial district.

– “Homebuyers are willing to buy well-located public apartments for SGD 1 million to have quality homes,” he explained. Government subsidies over the past few years have also increased purchasing power for customers who want to buy public housing for resale.

– Meanwhile, the sales of private apartments have also set a record high within two years, catching up with the strong waves of real estate markets around the globe.

Australia

– In February 2021, Australian housing prices saw their highest increase since August 2003 due to record low interest rates and government incentives. Prices in cities increased by 2%, led by Sydney and Melbourne.

– “Australia’s housing market is in a large-scale boom. Rapid growth has been driven by record low mortgage rates, improved economic conditions, government incentives and supply concerns. decrease, “explains Tim Lawless, lead researcher at CoreLogic.

– Australia’s central bank lowered interest rates to the bottom and committed to maintain at least three years. Residents are also looking for larger homes for home workspace. The rapid rate of price increase has sparked fears of lack of houses, causing buyers to rush to buy houses. According to the Commonwealth Bank of Australia, this situation could push home prices up 16% over the next two years.

– An auction for a small two-bedroom house in the suburbs of Paddington (Sydney) attracted more than 250 participants. Bidding price starts at 1.4 million AUD (1.1 million USD), 150,000 AUD higher than the starting price. In the end, the house was sold for 1.7 million AUD.

– The number of vacant homes is at record lows, and buyers’ demand is higher than average. These terms are beneficial to the seller. Buyers fell into the FOMO trap and reduced bargaining power

Mr. Tim Lawless at CoreLogic

– New Zealand home prices rose 13% in January from a year earlier. The problem became so serious that the government considered asking the Reserve Bank of New Zealand (RBNZ) to consider the effect on home prices when setting interest rates. However, the bank objected.

– Fears that the Australian housing market would plunge as workers lost their jobs quickly disappeared. Instead, the supply shortage is driving prices to explode. CoreLogic said the number of homes for sale in the first three weeks of February decreased 26% from a year earlier.

– “The number of vacancies is at a record low for this time of year. Buyer demand is higher than average. These conditions benefit sellers. Buyers fall into the FOMO trap (fear of being missed). ) and reduced bargaining power, ”commented Mr. Lawless.

– In January alone, home loan approvals rose 10.5%, according to data from the Australian Bureau of Statistics.

“The uptrend is being supported by record low interest rates, the belief that interest rates will remain low for years to come, ample credit supply and an improved economic outlook as the vaccine rollout promises. an appointment to end the pandemic, “said economists of the bank.

– However, the return of the Australian housing boom has raised concerns. One of them is the ability to increase household debt, while many young people have a harder time buying a home. According to a report in February, Sydney is the most expensive housing market in the world, while Melbourne is sixth.

China
-The risk of a real estate bubble is also a concern for the Chinese government. China’s real estate market has grown rapidly since the 1990s. Home ownership rates have soared. However, house prices also skyrocketed. More and more Chinese people cannot afford to pay for a home.

– Average house prices in China are 9.3 higher than people’s annual income, according to a study. For comparison, the figure is 8.4 in San Francisco, one of the most expensive cities in the US and in the world.

– Chinese authorities have tried many ways to cool down the real estate market. Beijing restricts mortgage lending and speculative buying. Real estate companies are also restricted from selling bonds to raise capital.

– The Chinese government has ordered real estate lending restrictions and the rule of “three red lines”. Thus, real estate companies doing business with losses will have to find ways to reduce debt.

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China has tried many ways to cool down the real estate market. Photo: Getty Images.

– Most recently, the Ministry of Natural Resources of China said key cities should coordinate auctions of residential land, held at some specific times of the year.

– Before that, the local governments of China put the land plots to the tender and did not set a schedule. Uncertainty causes real estate companies to rush into the auction in hopes of winning.

– Real estate developers such as China Evergrande Group and Sunac China Holdings Ltd. have to borrow massively from banks or sell bonds to mobilize capital to buy land. After developing the project, this group of businesses sold houses at high prices. This cycle continuously repeats, thereby pushing up real estate prices.

Source: ZINGNEWS

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