According to a poll by Reuters, one of the largest news agencies in the world, residential property markets in major economies will soar this year on huge fiscal and monetary support and amid a recovery from the pandemic.
Average home selling prices have hit staggering levels in 2021 in some countries. That trend is expected to continue, driven by low mortgage rates, swift vaccine rollouts and the easing of restrictions after deep pandemic-induced recessions last year.
The global boom in property prices comes alongside soaring stock markets, which quickly bounced back from a slump on pandemic-driven economic damage and devastating job losses, to focus on unprecedented stimulus and the recovery at hand.
Rising consumer confidence
Reuters polls of more than 100 property market experts taken between May 11-24 showed big upgrades to house price forecasts for Dubai, the United States, Britain, Canada and Australia compared with just three months back.
“Consumer confidence has risen strongly due to the success of vaccination programs and survey evidence suggests the pandemic has led to more people looking to move home. Supply shortages point to upward pressure on prices in the short term,” according to the analysts of the poll.
Almost 60 percent of analysts, or 55 of 92, who responded to a separate question on property markets across the globe, said risks to the outlook were skewed to the upside over the coming year. The remaining 37 said more to the downside.
The trend in the latest Reuters polls showed expectations for strong gains this year followed by slower growth in the next few years, moderated by increased supply and lower immigration as affordability becomes a bigger constraint.
Demand for office spaces
While there has been higher demand for both single- and multi-family homes in cities and towns, when asked how demand for office space would change more broadly over the next few years, respondents were split.
Forty-one of 78 respondents said it would decrease, including five who said the decrease would be significant, while the remaining 37 said demand for office space would increase, including two who said a significant increase.
House prices in Australia and Canada were forecast to gain in double-digits this year, while in Dubai they were expected to rise for the first time in six years. Britain’s housing boom was set to roll on too on ongoing government support alongside increased demand for more living space.
US house prices were expected to race ahead, rising at double the rate expected in February, driven by low supply and cushioned by hefty spending by the country’s administration and near-zero interest rates.
The outlook for the Indian housing market was one notable exception to the global trend. Indian house prices were predicted to stagnate this year, hurt by a devastating second wave of the coronavirus, which has crushed demand and offset government tax rebates and incentives for property developers.