The rating of cities with the most significant growth in real estate prices has been published. Moscow and St. Petersburg are in the top ten 2021

The rating of cities with the most significant growth in real estate prices has been published. Moscow and St. Petersburg are in the top ten

21.07.2021 17:30

Consulting agency Knight Frank has published a rating that includes 150 cities around the world, analyzed for indicators of housing costs. According to the results of the first three months of this year, two Turkish megacities, Izmir and Ankara, as well as the New Zealand capital, Wellington, have taking the leading positions in price growth. The value of real estate in these cities increased by 33.9%, 30.3% and 30.1% over the last year, respectively. Moscow ranked seventh with a 22.4% increase in prices. Next is St. Petersburg, which lost two positions in the rating over the last year (positive dynamics amounted to 22.1% in the first quarter of this year).

On average, the cost of a «square» increased by 7.4% in the 150 researched cities over the last year. Price increases were found in 128 of them. Double-digit increases were recorded in 29% of cities.

The full TOP-5 of cities in which the sharpest jump in the cost of housing has been observed is as follows:

  1. İzmir
  2. Ankara
  3. Wellington
  4. Istanbul
  5. Seoul

The rating was compiled on the basis of official statistics. Experts calculated the index of growth in the cost of housing taking into account the changes in real estate prices in the local currency in all market segments of these 150 cities around the world.

Rating features

When compiling the TOP, experts identified a number of noteworthy facts:

  • According to the results of the first three months of this year, the most rapid growth in property prices was revealed in Turkey and New Zealand. Thus, Izmir managed to move from the third (16.3%) to the first position of the ranking (33.9%) in a year; Ankara, from the fourth (14.8%) to the second (30.3%), and Wellington jumped up from the 32nd (7.6%) to the third (30.1%).
  • During the year, Moscow has climbed more than 130 positions in the list, moving from 143rd place in the first three months of last year to the seventh over the same period of time this year.
  • The dynamics of the increase in the value of real estate in St. Petersburg decreased slightly. Over the last three months of last year, the increase in prices was of 25.4% (fifth line); over the same period in 2021, 22.1% (eighth position).
  • The cost of «squares» in the 150 cities surveyed is growing at their fastest pace since 2007. It is noteworthy that 43 of them show an annual price increase of more than 10%. However, this trend is not developing everywhere — in 22 large metropolitan areas the value of real estate is declining, for example, in some Spanish and Italian cities.
  • In Asian megacities, the significant price increases that were characteristic of them are no longer observed. Thus, in Beijing, the cost of housing in the first three months of this year increased by only 3.6%; in Hong Kong, by 2.2%.
  • The governments of New Zealand, China, South Korea, Ireland and Canada have taken drastic measures to contain house prices in the first 6 months of this year. Meanwhile, there is still a pressing issue associated with a large housing shortage and low construction rates, which are observed in many cities.

Expert forecast

According to Marina Shalaeva, regional manager of the department of foreign real estate and private investments at Knight Frank, there are 3 factors that may support the increase in the cost of housing in the near future:

  1. The desire on the part of buyers to purchase an object at a bargain price. Currently, investors are not only actively exploring the local and foreign markets, but also regularly fly out for visits to those countries where restrictions on in-person events have already been lifted.
  2. Buyers’ interest in low mortgage rates: foreign investors are planning to take advantage of a profitable option before rates begin to rise.
  3. Deferred demand generated by local and foreign buyers in most markets. Despite the fact that sales and purchases continued to be processed remotely, many Ultra High Net Worth Individuals from Russia are still waiting for the full opening of the borders in order to inspect their properties of interest under normal conditions.

European real estate is the most demand on the world market. In some regions, on the contrary, consumer interest has declined. For example, the number of applications for the issuance of mortgages for home purchase in the United States decreased to the level of the pre-pandemic period. The situation on the markets in the near future, according to the expert, will largely depend on the pace of vaccination, new restrictions and cuts in fiscal policy.

Photo: Pexels

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