Across 150 Global Cities, Average Home Prices Jumped 7.4%

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Average home prices in a basket of major cities around the world rose 7.4% year over year in the first quarter of 2021, the strongest growth since before the Great Recession, according to a report on 5th July from Knight Frank. In addition, 43 of the 150 cities tracked in the report—or 29%—registered annual price growth of more than 10%, the data showed. And prices are set to rise even further, at least for the moment, according to Kate Everett-Allen, Knight Frank’s head of international residential research and the author of the report. “Three factors may push prices higher in the short to medium term. Firstly, the fear of missing out (FOMO)—with borders closed, investors may look closer to home to take advantage of rising prices,” she said in the report. “Secondly, some buyers may be keen to lock in to lower mortgage rates before interest rates start to shift higher, and finally, with large sums of accrued savings evident in some markets, a second home may now be within reach for some.” The Turkish city of Izmir, located on the country’s Aegean coast, saw the biggest growth, with a nearly 34% surge in average home prices in the first three months of 2021, the report found. Ankara, Turkey’s capital, ranked second on the Global Residential Cities Index with a 30.3% year-over-year jump in average prices, while Istanbul was fourth on the list with average prices up 28.8% for the same time period. Some of the price appreciation can be chalked up to steep inflation in the country, which has driven real estate prices higher. Wellington, New Zealand’s capital, took the third spot on the index. The average price of a home was up 30.1% in the first quarter, compared to the same time in 2020. Seoul, the capital of South Korea, rounded out the top five with a 26.1% annual rise in average home prices. Phoenix was the only U.S. city in the top 10. There, average prices grew 20% in the first three months of 2021, compared to the same time the previous year. Across the 15 U.S. cities included in the index, average prices rose 14%, the data showed. Still, not every city is seeing positive price growth. “It’s not a global boom—22 cities are still seeing prices decline year-on-year with several key cities in India, Spain, Italy and Israel amongst them,” Everett-Allen said. “Asian cities, whilst resilient, are not the powerhouses of growth they were in 2018—Hong Kong posted 2.2% annual growth and Beijing 3.6%—although luxury sectors in both cities are faring much better.” Dubai took the last slot on the index after registering a 4.4% drop in the average price of a home in the first quarter of 2021, compared to the first quarter of 2020, the report found. Venice and the Indian city of Kolkata were also in the bottom three, with 4.3% and 3.8% drops, respectively.