What lies ahead for the global housing market in 2021
Global housing market predictions are optimistic for 2021, this optimism fueled mostly by low interest rates and a consistently high demand for residential property.
One of the most noticeable long-term consequences of the COVID-19 pandemic has been the structural increase in the demand for residential properties across the globe. The recovery of the global housing market has surprised almost everyone as housing prices are expected to stagnate overall in 2021, however there are a few regions around the world where housing prices continue to rise despite extremely low interest rates.
Housing markets are expected to thrive
If we are to base future predictions on the current state of the global housing market, we can expect to see a drastic increase in the number of house and residential properties sold in 2021. It is expected that annual sales growth will increase from 5% in 2020 to more than 10% in 2021. As prices of existing homes are continually rising, more and more people are looking to purchase new homes. With new home sales increasing exponentially and housing prices increasing in small segments only, experts believe the sentiment of the global housing market to be higher than it has been in years. More and more people are relocating to suburban areas and lower-tax locations which only further adds to rising pressure in the housing market and magnifies the ongoing housing boom currently happening across the world.
Housing prices continue to rise despite low interest rates
The prices of residential properties in many regions around the world are rising steadily despite the high demand for housing and exceptionally low interest rates. The latest statistics have shown that property prices have risen in recent months in regions like Slovakia and Moscow, despite low interest rates and a growing demand for residential properties in those exact regions. However due to the consequences of the pandemic on housing markets in regions where interest rates are low, these steady increases in housing price have slowed down, but only in the short-term. Experts predict this lowered rate of price increases will be short-lived because the housing market in these regions will start to recover toward the end of 2020 and the demand for property, by locals and foreigners, will fundamentally remain as strong as it was in prior years. It appears as though lowered interest rates will not hike up the demand for residential properties in these regions as is usually expected.
What about holiday destinations?
The housing markets of holiday destinations remain seemingly unaffected by the pandemic. To be more specific, they have not been negatively affected. Housing markets in holiday destinations are expected to experience exponential growth in coming months with a further increase in residential investment and an uptake of sales in housing properties throughout regions known to be tourist destinations. Experts attribute this expected rise in housing sales, despite the economic consequences of the pandemic, to the fact that people are slowly becoming more open to travelling and visiting their favorite holiday destinations again. The housing market of holiday destinations, like the Dominican Republic for example, has rapidly grown in recent years and thanks to robust tourism growth and hardly any restrictions placed on foreigners who want to purchase property. This is why the housing markets of holiday destinations like the Dominican Republic have remained as robust as ever and the same can be said for other popular holiday destinations across the world.
Concluding remarks
Despite increasing housing prices in certain regions and drastic declines in housing prices in other regions, the general expectation for the global housing market for 2021 is that the price of houses will not necessarily decrease. On the contrary, housing prices will rise but the rate at which housing prices increase will slow down. In other words, the prices of houses will increase generally around the world, however at a slower rate than what we have witnessed in recent years. Now is the best time to enter the real estate market if you are looking at purchasing a property regardless of where you are in the world, and this resource is a great way to help you get started.
