25 Jul

Are other Countries experiencing Housing Price Inflation?

General

Posted by: Leslie Morris

If you have yet to purchase your first home, or if you’ve considered selling your home and finding something new, taking a look at the market and finding something in your price range can be tricky.  Feeling overwhelmed?  You’re not alone.  Many cities all across Canada are experiencing the same thing – rising house prices without the accompanied increase in wages, making it seem impossible to either get into the housing market with your first purchase, or to trade up or down.  Many people are even opting to rent for longer periods of time; starting their families before moving into a place they can call their own. You may have even considered a move right outside the country in order to afford the house of your dreams, but you’ll be surprised to discover that Canada isn’t the only country experiencing large jumps in housing prices.  On the large scale, Canada sits at about number 4 in housing price increases.

Take Australia, for example.  In the last 4 years housing has seen an increase of 66% (compared to Canada’s 102% in the last 4 years).  Israel has seen a 61% increase, but 9% of that increase came in the last year (compared to Canada’s 10.5% in the past year).  New Zealand has surpassed us with a total of a whopping 132% increase in 4 years, and even Sweden is at a 115% increase.  Yikes!  If you were living in China you’d have noticed an increase of 44% and Britain trails at 30%.  The States have seen an increase too, although they’re sitting around 10% in the last 4 years with a 4.8% over the past 12 months.

Those aren’t even the biggest hikes over the last year; if you’d been living in Hong Kong you’d be looking at a huge jump of 14.4% and Iceland tops the list at a 17.8% increase.  Over 2 years housing prices in Hong Kong have reached an extraordinary 236% increase, with a tiny 161 square foot apartment commanding prices as high as $500,000 US.  Take a look at your standard 3 piece bathroom, and you’ve got an idea of how much space that is.  The apartments are dubbed “micro” for a reason!

Ireland, Estonia, Romania and Germany have also seen gains, although at a far lesser scale than Hong Kong, Iceland, New Zealand or Canada (between 7% and 11%).  In fact, 18 of 23 European housing markets have posted an increase over the last 2 years.

If you’re looking at a house in the country you’re more likely to find something reasonably priced.  Most of the gains have been exclusively found in large cities, so depending on how close you feel you need to live to amenities, your price is negotiable.  In China you’ll find the biggest price difference – homes in the cities are at an average of 55% more expensive than in the rural areas.  In Canada, that number hovers around a 13% difference between urban and rural.