_Australia ranked 19 in the world for global house price growth
The Global House Price Index Q2 2020, which tracks the movement in mainstream residential prices across more than 50 countries and territories worldwide using official statistics, found Australia had seen growth of 6.1% in house prices over the 12 months to 30 June 2020, despite a fall of -0.4% over the past six months and -2% over the past three months.
Australia has risen 37 places up the global rankings from one year ago when it came in last at 56, with negative growth over the previous 12 months of -7.4%.
It has, however, slipped from the first quarter of 2020 when it was ranked 10th, with 12-month house price growth of 8.6%.
Knight Frank’s Head of Residential Research Australia Michelle Ciesielski said the data in the most recently released Knight Frank Global House Price Index Q2 2020 was backward-looking, covering the year up to June 30, when the COVID-19 pandemic had hit most global markets.
“It is not unusual for official house price indices to be published with a two or three month time lag, but this quarter 29* of the 56 countries and territories we track have yet to report their figures for Q2 2020, no doubt as a direct result of COVID-19 and operational challenges,” she said.
“Despite this the data still offers a glimpse into the impact of COVID-19, with the number of countries and territories seeing a decline in prices increasing again. In total nine per cent of the areas tracked registered annual price declines in Q2 2020.
“While annual price growth in Australia has fallen slightly from the previous quarter, growth is still positive and 1.4 per cent higher than the average annual price change of 4.7% across the 56 countries and territories tracked in the index.
“Australia has dealt with the COVID-19 pandemic better than some other countries and territories around the world, with the length and severity of the lockdown not as strong, which partly explains its stable performance.
“However, it can also be attributable to the state of the housing market prior to the pandemic, with Australia’s market strong heading into 2020 with demand high and stock levels low.”
Knight Frank National Head of Residential Shayne Harris said Australia’s housing market has seen continued demand throughout the pandemic, but fewer transactions due to sellers choosing to ‘wait and see’ how the pandemic would play out.
“In Sydney the market continues to be underpinned by a severe shortage of stock for sale by both auction and private treaty,” he said.
“Whilst in the past eight weeks the difficulties around obtaining finance have seen the number of registered bidders thin out at auction, the clearance rate remains stable as do prices across the inner and middle rings of metropolitan Sydney.
“In Melbourne market conditions have been in steady decline for the past four months, with volumes and prices heading gradually south, although there was a very slight uptick in August.
“The cities second lockdown, combined with reliance on overseas immigration and education to support the market, could see these conditions continue beyond the other capital cities who are ahead of the curve in relation to recovery.
“In Brisbane quicker recovery from the pandemic than expected, combined with a tight apartment supply pipeline, has seen the Brisbane market emerge in a very strong position for 2021 and beyond.
“Coming off an extended period of low price growth Brisbane’s affordability is the best capital city side by side with Perth in the short to medium term.”
The Knight Frank Global House Price Index found Turkey led the annual rankings in the year to Q2 2020, with prices up 25% year on year, but inflation in the country currently sits at around 12%.
European countries accounted for 8 of the top 10 rankings in Q2 2020, with Baltic and Central and Eastern European nations well represented.
New Zealand was the best performing country in Asia Pacific, with growth of 9.1% over the past year, but it slipped in the rankings from 2 to 11 between March and June.