Global housing boom Record demand and record visitors l Vesta blog

Global housing boom. Record demand and record visitors.

January 14, 2022

Property values across most of the globe have risen to record levels through 2021.

According to Knight Frank's latest Global House Price Index, year on year prices rose in 54 of 56 countries and territories tracked, with only Morocco and Malaysia not following the trend. The index also highlighted the value of an average home increased by 9.4% in the 12 months to Q3 2021.

Turkey, South Korea, and New Zealand have been the best performing countries with annual percentage changes of 35.5%, 26.4%, and 21.9% respectively. According to the index, the United Kingdom in comparison has seen an 11.8% year-on-year increase.

The Guardian ran a post-Christmas headline "UK house price growth set to slow in 2022, property experts say". The key theme to these 'experts' views centres around affordability and household budgets. To put it simply, the view is that property values are reaching a point that is unaffordable and therefore demand and in turn, sales will drop. Prices are still expected to continue to increase between 3-5% in 2022, so there is no talk from the key 'experts' about a crash or correction anytime soon. Not that many 'experts' have ever been able to predict such an event!

In a complete contradiction, Rightmove have said their visitor numbers over the Christmas period were the highest they have seen with buyer demand being up by 23% versus the previous year, indicating there is not yet any let-up in people wanting to buy. Similarly, vestaproperty.com visitor numbers in the first week of 2022 are up by 170% versus the same week in 2021. The visitor numbers on Monday the 3rd of January were over 400% higher compared to the same day in 2021, making this our second biggest day of all time!

Over the last 12 months, the availability of stock has been a big factor in prices being pushed up with buyer demand exceeding availability and causing a 'buyer frenzy'. Many agents were struggling to get new listings as people held back from selling which only added fuel to price increases.

However, interestingly, according to Rightmove data, this is starting to change with people requesting agents to appraise their home on the up. In fact, the 30th of December they claimed was the busiest day for this activity since May 2021 and in the top 10 of busiest days ever. So maybe things are starting to change and we might see a switch to an oversupply of stock in 2022, which ultimately may have a downward trend on price growth?

Many countries, including the UK, have and will start to tighten their fiscal and monetary policy and it is very likely this will provoke a slowdown. Interest rates have started to increase but this does not yet seem to have had an impact on buyer demand. Further rate increases, which are inevitable, are likely to start taking some effect in due course.

In the UK many new mortgages are 3-5-year fixed rates so the overall impact of more immediate interest rate increases might not shift the demand for some time. Other factors like the ability to work remotely, meaning there is greater demand for in-home offices; demand for larger gardens and more space will also keep average house prices high. Whilst we have seen an increase in new sale enquiries and valuations the buyer demand continues to outstrip stock, so prices, at least in the UK, are likely to continue to grow albeit slower due to affordability.

If you are considering selling or buying an investment property or simply want an investment valuation, please get in touch, or visit www.vestaproperty.com/sell so we can start the process with you.

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