While prices have soared across the world , the same can not be said for rents . And again , this is something that has been similar in Australia , as it is elsewhere . While cheap and easily accessible finance has pushed up values , job loss , particularly amongst young people ( the main group that rent ), has pulled back rents . In most countries , price growth has been far more excessive than rental growth .
This mismatch between rents and values also extends to commercial property - offices may have high vacancies right now but that isn ’ t impacting values like you would necessarily expect .
Other housing shifts experienced in Australia have also been consistent in many other countries . Big changes to the way we work have allowed people to move to regional and outer suburban areas that may have been inconvenient prior to the pandemic . In the United Kingdom and United States , outer suburban areas have increased faster than inner urban areas . In Germany , house prices outside the seven biggest cities rose by 11 per cent last year , compared with six per cent within them .
Bigger properties , as well as those at very high price points , have also done well . Conversely , more challenging conditions have occurred in apartment markets , as investors have been more cautious and owner-occupiers have shunned smaller homes .
Without intervention , this coordinated house price boom is set to continue . Rising inflation , which was causing concern at the start of the year , has become less of an issue , suggesting interest rates will remain low as predicted by most central banks . As economic conditions improve , so too are unemployment rates - more people working means households have more money and less housing distress .
In Australia and New Zealand , rolling lockdowns will further accelerate pricing than it otherwise would . The total number of properties for sale is declining across both countries , creating greater competition from buyers . It ’ s also likely to lead to problems in some rental markets - the rental market was doing well up until the end of June however job loss amongst renters is likely to lead to lower rates of rental growth .
With rising concerns about affordability , it ’ s likely that we will see greater intervention from regulators . In New Zealand , loan to value ratios were reviewed in March and prices began to plateau . Further restrictions are to be put in place in October , which the Reserve Bank of New Zealand expects to lead to price declines . Over the rest of the year , we can expect to see similar measures rolling out across the world .
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