Australia is the 13th strongest real estate market in the world

The latest Knight Frank Global Residential cities index shows Brisbane came in 10th place with house prices growing by 28.4% in nominal terms in the last 12 months to March 2022.

Hobart was Australia’s second best performing capital market with growth of 26%, followed by Adelaide where prices jumped 25.1%.

Darwin was 23rd (19.9%), Canberra 26th (18.4%), followed by Sydney 31st (16.1%) and Melbourne 66th (9.2%).

Istanbul was the top international city for price growth, according to Knight Frank, with a 122% increase in 12 months, followed by Ankara (111.7%) and Izmar (105.9%).

Turkey leads the index with nominal price growth, crossing the rarefied three-digit threshold (110%), but subtracts its consumer price inflation from 69.9% and the real figure deflates to 30 %.

Overall, Australia has performed well against the rest of the world, recording an average annual growth of 18.3% in major capital cities.

According to Knight Frank, the Australian property market grew by 15.8% in nominal terms, but when adjusted for inflation, that figure drops to 10.1%, putting it 13th on the list.

Report author and residential research partner at Knight Frank, Kate Everett-Allen, said that while the last 12 months have been marked by strong house price appreciation, a hawkish turn by central banks will likely lead to a slowdown in growth.

“(For) economies whose monetary tightening cycle lags that of New Zealand, the Auckland path might be one to watch,” Ms Everett-Allen said.

“Price growth in Auckland is 5.1%, down from 22.7% a year ago.

“The country’s five interest rate hikes since October 2021 have influenced buyer sentiment, with home sales falling 40% from 4,013 in the first quarter of 2021 to 2,403 in the first quarter of 2022.”

Ms Everett-Allen said the market cycle is changing as large parts of the world shift from a pandemic to a post-pandemic landscape.

“Inflationary pressures increase and the cost of debt rises as interest rates rise,” she said.

“In this environment of increased uncertainty, higher taxes and increased regulation of the real estate market (for example, a ban on foreign buyers in Canada), we expect the rate of price growth to slow in most markets, but we believe that a sudden shift to negative price growth is unlikely for most cities in 2022.

“Along with key fundamentals such as economic growth, supply levels and employment, the speed and magnitude of interest rate increases will determine how much price growth slows over the course of the year. the year to come.”

Penny D. Jackson