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Local home prices grew 30% in third quarter, says Knight Frank

By Chinedum Uwaegbulam
13 December 2021   |   4:02 am
As global home prices ticked up in the third quarter, there’s evidence that they’ve peaked in some parts of the world.

Aerial view of Lagos

As global home prices ticked up in the third quarter, there’s evidence that they’ve peaked in some parts of the world.

For instance, the Nigerian residential real estate market has witnessed an uptick in prices over the last one year.

Within the country, Lagos and Abuja remain the strongest markets with the most expensive homes and an average threshold rise in prices between 25-30 per cent. House prices are envisaged in this continuum for the next quarter, according to Knight Frank Nigeria.

“The above is premised on general trends in inflation, which impacted prices of goods and services, including building materials leading to an increase in construction cost and high rate of urbanisation driven by insecurity in other parts of the country,” Chief Operating Officer, Knight Frank Nigeria, Mr. Frank Okosun said.

Okosun, who is a fellow of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), said: “Also, it is expected that the demographics of a significant group of the population, the millennial will drive the new dynamics of housing need, either as renters or homebuyers with more sophisticated taste and preference which will ultimately drive property pricing.”

MEANWHILE, in the third quarter report released on the global house prices by Knight Frank , the average price of a home was up 9.4 per cent year over year in the third quarter, compared to a 9.2 per cent annual gain in the second quarter.. In addition, 54 of the 56 countries tracked in the report saw positive price growth between July and September.

“Only Malaysia and Morocco bucked the trend,” Kate Everett-Allen said. “Furthermore, the proportion of housing markets witnessing annual price growth in excess of 10 per now sits at 48 per cent, up from 13per cent at the start of the pandemic.”

Although this real estate boom is expected to extend into 2022, the report did sound a note of caution.

“Eighteen countries and territories saw their rate of annual price growth moderate between June and September this year, among them some of the strongest performers since the start of the pandemic: New Zealand, the United States and the United Kingdom,” she continued.

“Here, interest rate hikes, changes to property taxes and affordability concerns are contributing to slower rates of growth.”

Turkey saw the highest nominal growth—not adjusted for inflation—last quarter, registering a 35.5% annual increase in the average price of a home, the data showed. It’s real growth—which is adjusted for inflation—was 15.9per cent.

South Korea was the country with the highest real growth in the same period, with average prices rising 23.9per cent. It had a nominal growth of 26.4 per cent.

Among the other countries that saw average prices rise the most in the third quarter are New Zealand, with 21.9 per cent nominal growth rate and 17 per cent real growth; Australia, which registered an 18.9 per cent rise in nominal prices and 15.9 per cent increase in real prices; and the U.S., where real prices were up 13.3per cent and nominal prices grew 18.7 per cent.

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