Ray White Now | September 2021 | Page 7

Why COVID-19 continues to be a global property market accelerant
Australian house prices have risen by 17 per cent since the start of COVID-19 . In our other major market of New Zealand , we have seen an increase of 42 per cent . This extreme growth becomes even more apparent at a local area level . In some suburbs , prices have jumped by over $ 1 million . In the biggest cities of Sydney and Auckland , we have never seen such a sharp increase .
COVID - 19 house price acceleration
Median house prices in Sydney and Auckland
1M
Sydney
1M
800K Auckland
600K
400K
200K
0 1995 2000 2005 2010 2015 2020
Shaded area is the pandemic time period Source : ​ ​Corelogic , REINZ , Ray White
This extreme price growth is however not unique and in most countries around the world , remarkably similar housing market conditions have occurred through the pandemic . Although working like we used to has been a big problem , access to money hasn ’ t . With record low interest rates in most countries , as well as high levels of quantitative easing , banks are flushed with cash . In Australia , the situation is so extreme that bank CEOs have commented that they have so much cash they don ’ t know what to do with it and the impact on their profitability is problematic . It ’ s likely that a similar situation is occurring elsewhere in the world .
The other main driver has been that locked down people don ’ t spend much , so savings rates have been particularly high . While most of the world is now opening up , there are still frequent lockdowns in many of them . Travel restrictions are also in place in many countries and this too is impacting on household spending .
7