In real terms, global house prices now ex­ceed their im­me­diate post-G FC ave­rage le­vels by 29%

Real Estate Bubble? Not In Spain

Real residential property prices.
Real residential property prices.

According to a re­port by the Bank for International Settlements, global real house prices in­creased by 4.6% year on year in ag­gre­gate in the first quarter of 2022. This strong growth in real terms re­flected a surge (+11.2%) in no­minal terms – the first dou­ble-­digit one re­corded since the eve of the Great Financial Crisis – partly offset by the ac­ce­le­ra­tion in con­sumer price in­di­ces.

Real house price developments continued to diverge between advanced economies (AEs, +8.5% year on year) and emerging market economies (EMEs, +1.6 %).

Real house prices surged in Turkey (by around 35%), Canada (20%), Australia(14%) and the United States ( 12%). They fell by 3– 4% in Brazil and India.

In real terms, global house prices now exceed their immediate post-G FC average levels by 29%. They have been up by 41% in the AEs and by 19% in the EMEs.

In aggregate for the group of AEs, real residential property prices grew by 8.5% in Q1 2022, up from 7.8% in the last quarter of 2021. Prices rose in double-digit rates in Canada (+18%), Australia (+14%) and the United States (+12 %), reflecting marked nominal price growth (20–25%).

They increased somewhat less vigorously in Japan(+8%) and the United Kingdom (+3%) (Graph 4).Prices were up by 3% in the euro area, where developments continued to vary significantly among member states. Strong real house price growth persisted in the Netherlands (+11%), Portugal (+8%) and Germany (+6%). Real prices grew less rapidly in France (+3%), and remained roughly flat in Spain (+1%) and Italy (–1%)

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