A poll recently conducted by the news agency Reuters showed that there is expected to be a growth in residential property markets in major economies in the current year because of huge monetary and fiscal support and because of the recovery of the major economies from the Covid-19 pandemic hit. The poll report also highlighted the risks for prices skewed to the upside.
In some countries, the prices of homes have reached quite high levels so far this year. experts expect that trend to continue for the rest of the year because of low mortgage rates, fast roll outs of Clovid-19 vaccine and the easing of restrictions and lifting of lockdowns following deep pandemic-induced recessions in 2020.
Along with the global growth in property prices, there has also been a rise in stock markets which also showed a fast bounce back from a slump on pandemic induced economic damage and devastating job losses and is now focused on unprecedented stimulus and the recovery at hand.
There were indications for big upgrades to house price forecasts for the United States, Britain, Canada, Australia and Dubai compared to forecasts made just three months ago and was more than the expected GDP growth and inflation of consumer prices, as showed in the Reuters polls which was participated by more than 100 property market experts and was conducted between May 11 and 24.
“Consumer confidence has risen strongly due to the success of vaccination programmes 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,” said Andrew Harvey, senior economist at Nationwide.
The risks for the property price boom were also expected to be skewed to the upside all over the coming year, opined about 60 per cent of the experts and analysts of the study. The remaining 37 said more to the downside.
Experts also predict that the housing sector will make strong gains in this current year while there would be slower appreciation of prices in the skewed to the upside. That would be because of increased home supply, lower immigration and with affordability turning out to be a bigger constraint to consumers purchasing homes.
There was split opinions among the experts and analysts on the issue of the manner in which demand for office space would change more broadly over the next few years even though there has been higher demand for both single and multi family homes in cities and towns.
“The enforced remote-working experiment of recent months will cause a dramatic demand shift in the office sector, with as many as 50% of office-based employees working from home at least once a week,” said Matthew Pointon, senior property economist at Capital Economics.
“Even with a heroic supply response through substantial conversions and demolitions, we expect vacancy to rise markedly in the next five years and still be elevated in 2030.”
(Adapted from Investing.com)