Covid-19 has flipped the list of top 10 countries for house price growth, thrusting Australia up 46 places defying predictions from the Reserve Bank so far.
Australia ranked 10th on the list with prices rising on average by 8.6 per cent behind the likes of Turkey with a 15 per cent increase, New Zealand 14.5 per cent and Lithuania 13.8 per cent, according to the annual Knight Frank global house price index.
The data showed Covid-19 hit sales volumes rather than prices as the pandemic peaked in Asia but was yet to take its toll on many parts of Europe and South America.
Knight Frank head of residential research Michelle Ciesielski said it was unlikely that sellers would lower asking prices significantly given low interest rates and the introduction of the mortgage holiday slowing distressed sales.
“Price growth was ramping up significantly prior to Covid-19 following a lull in activity off-the-back of a market correction and hesitation with a federal election and several state elections being held, while adapting to new responsible lending compliance,” Ciesielski said.
“Australia was in 10th position registering a punchy 8.6 per cent annual growth in the first quarter of 2020, up from 5.3 per cent in the fourth quarter of 2019 when in 24th position.”
In Australia, auction clearance rates had improved to above 55 per cent in recent weeks however the impact of new Covid-19 cases and restrictions in Victoria was yet to affect the data.
Top 10 countries for house price growth
|2020 Q1 Rank||Country||12-month-change||2019 Q1 Rank||12-month-change|
^ To March 2020. Source: Knight Frank
“Surprisingly, of the 56 countries and territories tracked, only one saw prices decline year-on-year, Finland and only by 1.2 per cent,” Ciesielski said.
“Since we first started the index in 2008, this represents the highest proportion (98 per cent) of countries registering positive price growth on an annual basis.”
Places with a low cost of living showed the most growth in house prices when this report was compared to Mercer’s 2020 cost of living ranking.
Hong Kong topped the cost of living list however house price growth was only 2.1 per cent, similarly for third placed Tokyo where house prices increased 3.7 per cent across the country.
According to the Mercer report Australian cities fell in the ranking this year because the local currency depreciated against the US dollar.
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Top 10 Cities for Cost of Living to March 2020
|1||Hong Kong||Hong Kong||1|
|6||New York City||United States||9|
Sydney ranked 66th (compared to 50th last year), Melbourne ranked 99th (79th in 2019), Perth 104th (87th in 2019), Canberra 118th (96th in 2019) and finally Adelaide and Brisbane tied at 126th (109th and 103rd in 2019).
The survey used for companies to determine the cost of sending employees on international assignments found the most expensive cities were Shanghai and Beijing in China as well as Bern and Geneva in Switzerland.
The least expensive cities were in Africa: Tunis in Tunisia, Windhoek in Nambia, as well as Central Asian cities Tashkent in Uzbekistan and Bishkek Kyrgyzstan.
Factors such as currency, inflation and accommodation price stability were driving factors driving forces behind these results.