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As the global economy recovers post-pandemic and vaccination drives roll out, the demand for accommodations increases again. Average home selling prices have already risen in 2021 in some countries. This trend is expected to continue as restrictions ease post-pandemic and mortgage rates lower. The stock markets have begun to soar again. A Reuters poll of more than 100 property market experts from May 11th to 24th shows a marked increase in house price forecasts for the United States, Britain, Canada, Australia, and Dubai compared to three months back, outpacing expected GDP growth and consumer price inflation. House prices are expected to rise in Dubai after half a decade. A rise in prices is expected in Canada and Australia as well.
Almost every major economy shrunk in the past year as consumers behaved in a fiscally conservative way among pay cuts and job losses. With relief measures being handed out, customer confidence is returning, especially in countries undergoing swift vaccination rollouts. Demands for houses of all sizes have been increasing since January in the US. About 60% of the analysts polled speculated an upward shift in housing rates in the coming year, while about 37% expected a downward trend. The remaining 3% were undecided. However, with an increase in working from home, most analysts were split on what would happen to the pricing of commercial properties, such as office spaces. Matthew Pointon, the senior property economist at Capital Economics, quotes: “The enforced remote-working experiment of recent months will cause a dramatic demand shift in the office sector, with as many as 50% of office-based employees working from home at least once a week”. American house prices are expected to rise rapidly at double the rate expected in February as supply decreases and small interest rates. A similar trend is expected in the United Kingdom as well. Hence, the coming months may be an excellent time to make a property sale if you own properties in the US, the UK, Australia, or Canada.
However, many major economies in the global south will miss out on this boom. Countries such as India, Argentina, and Nepal are in the throes of a deadly second wave. The vaccination progresses sluggishly as IP laws prevent many countries from ramping up vaccine manufacturing. Hence, property prices are expected to stagnate for another year in these countries. Some experts also speculate a further slowdown in the event of the third wave, which is suspected of starting in October/November 2021.
The pandemic pushed the global economy into a recession last year, but much of it has already bounced back. Rapid vaccination and stimuli to the markets will ensure that the world economy recovers entirely from the unprecedented year that was 2020.