How has UK Property Performed vs The Rest of The World? - Direct House Buyer
Since the start of the pandemic and when the UK went into lock-down in march 2020, house prices in the UK have increased twice as fast as previous years but has this happened for the rest of the world? The COVID-19 Pandemic has been a global crisis with most of the world greatly affected. House prices in the UK increased by over 10% in the past year and it is interesting to see what has happened in the rest of the world. In the UK many had attributed the Stamp Duty Holiday to the scramble of buying activity from people wanting to take advantage of the tax saving. Many thought that the property market would slow down when the Stamp Duty Holiday came to an end in September 2021 but instead the property market has soldiered on stronger than ever.
Further evidence that our property market wasn't just fueled by the stamp duty tax saving, can be seen when looking at similar growth in other countries who didn't have a tax saving incentive to buy a house during the pandemic.
How Has the Property Market for The Rest of the World Performed
Many had thought that it was just The UK that has experienced such an acceleration in house price growth but it is not the case. The national average house price in the UK has risen in line with the rest of the world. Research of 56 countries from Knight Frank shows that house prices rose globally by 10.3% which is very similar to the 10.8% UK growth for the same period.
The Top 10 Best Performing Countries for House Price Growth
Data taken from Knight Frank Global House Price Index
- Turkey 59.6%
- New Zealand 22.6%
- Czech Republic 22.1%
- Slovakia 22.1%
- Australia 21.8%
- Netherlands 20.3%
- United States 18.8 %
- South Korea 18.4%
- Jersey 18.4%
- Estonia 17.3%
25. United Kingdom 10.8%
The UK is in 25th place for experiencing the fastest amount of growth during 2021. The surprising growth figure of 59.6% for Turkey is much disputed due to Turkish inflation being 36% during 2021. Interestingly there were only 3 countries in the world that experienced negative price growth during 2021, being Malaysia, Morocco and Malta.
Property Prices Increased Twice as Fast in 2021
Property prices increased twice as fast during 2021 compared to previous years. On average we see prices increase between 4 and 5%. Last years growth was over 10% for nearly half the countries measured by the global house price index. At Direct House Buyer we have reported on how this is the fastest rise since 2005 it is also the same case for the average for the 56 countries measured by Knight Frank. The rate of growth did slow during the final quarter of 2021 but it is expected that further period growth will be displayed on the figures due to be soon reported as we have had such a strong start to 2022.
Property Prices Increased Twice as Fast in 2021
The number one reason is the shortage of houses for sale. The UK, USA and Canada have all reported the largest shortage of housing on records. The mismatch between the number of house buyers and available stock has caused bidding wars which have pushed house prices up. Employment and wage increases have remained strong and this has enabled a large pool of buyers who are competing in bidding wars when making an offer to buy a house. Many countries have fallen short of building an adequate number of new homes and the shortage of available houses vs the need of the population needs to be addressed.
Are Other Countries Experiencing Bidding Wars
Bidding wars are not just happening in The UK, countries such as The USA ,Canada, Australia and China have experienced climates where there are too many buyers fighting over a limited inventory of property for sale. In Europe major cities such as Amsterdam have experienced asking prices being pushed up by 20-30% due to bidding wars with buyers unable to buy a house even if they offer more. Interestingly, with house prices rising in Amsterdam, the local authority are introducing measures to help make buying a house in Amsterdam less desirable. Particularly, for overseas investors who are buying property as a rental investment for AirBnB. Amsterdam have now limited the amount of days you can rent out your property on AirBnB to just 30 days a year, which will surely stop that business opportunity for many property investors.