Five Cities around The World Experiencing Housing Market Boom

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The Covid-19 pandemic has interrupted our daily lives in more ways than anyone can count. Whether it’s travel, live entertainment or even medical devices -- so many of the things which we normally depend on have become more difficult to access. But it’s not just basic daily necessities that have become more expensive or hard to find. Real estate, too, has seen both shortages and much higher prices than usual. For sellers, all-cash offers are rolling in; meanwhile, buyers can only hope to find a home that meets their needs. While there are some signs of a possible reprieve from housing shortages, such as falling lumber prices, the market remains chaotic for the time being. To help ease the pain for buyers, some governments are stepping in and providing assistance. Located in Southeast China, Shenzhen has a population of over 12.5 million and links Hong Kong to mainland China. The city is home to a large shopping mall selling designer items. And the real estate market in Shenzhen is booming, where prices are up 16% over the past year. About $1.9 million for a 1,900-square-foot apartment. To help keep prices under control, China’s government is taking aggressive measures. For example, the government has set price ceilings on more than 3,500 properties. Several banks then said they wouldn’t finance properties over prices set by the government. New Zealand is one of the least affordable housing markets in the world at the moment. In fact, an Organisation for Economic Co-operation and Development (OECD) report showed that among its members, New Zealand had the highest share of people in the bottom income quintile spending 40% or more of their income on rent. The report showed that figure at about 55% of renters. While Mexico has a higher share for those with mortgages, New Zealand is still quite high. For homebuyers in New Zealand, over 40% of those in the bottom quintile spent at least 40% of their income on mortgages. While government intervention has been a bit slow thus far, the Central Bank of Australia says it will increase the debt-to-income assessment rate on mortgages from 5.1% to 5.25%. This move may decrease financing on high-value properties. Dublin has a red-hot housing market at the moment, with many people currently priced out of the market entirely. As of April 2021, the mean purchase price for homes in Dublin was nine times that of the mean income. Imagine having a salary of $50,000 and finding the average home cost in your area is $450,000. The situation is unsustainable; only 12% of 25-39-year-olds are homeowners in Ireland. Governments there are taking steps to address the situation, such as by increasing property taxes. They are also maintaining strict lending rules for home purchases. Housing prices have been through the roof in Canada, and in Toronto more specifically. Toronto sits near the top of the Teranet–National Bank House Price Index. While some smaller cities in Canada have seen higher growth rates, Toronto currently has a healthy year-over-year growth rate of nearly 16%. One step the Canadian government is taking to help tamp down the explosion in prices is by proposing a national vacancy tax. The proposal would result in a tax levied against foreign buyers who don’t reside in Canada. The proposed tax is 1% and would go into effect at the beginning of 2022. This island city-state isn’t just the setting of "Crazy Rich Asians" -- it also happens to be home to a booming real estate market. According to reports that housing prices in Singapore rose in all but one quarter in 2020. In the first quarter of 2021, prices increased another 3.3%. While that sounds modest, it happens to be the steepest rise in almost three years, according to the Reuters report. Like many other cities around the world, this comes despite a severely struggling economy. Current conditions have experts predicting government intervention, which it last did in 2018 after a 9% annual price increase. This may lead to an increase in stamp duties for foreign buyers.