A new real estate boom is on the horizon, as experts foresee a significant rise in property prices worldwide over the next ten years. According to a joint survey conducted by the German economic institute Ifo and the Institute for Swiss Economic Policy, real estate prices are expected to increase by an average of nine percent annually. In Eastern Europe, this growth is predicted to be even higher.
Timo Wochner, an analyst at Ifo, explains that the driving force behind this surge in house prices is primarily the increasing demand, rather than supply factors. The 1,405 experts who participated in the survey from 133 countries anticipate that rising living standards, higher incomes, population growth, and the desire for more living space will fuel demand in various regions across the globe. Additionally, the trend towards remote working, such as the growing popularity of home offices, will also contribute to the increased demand for housing.
Wochner further explains that limited production capacity, rising building material costs, and a scarcity of building land are some of the factors responsible for driving up property prices, as identified by 27 percent of the experts. Moreover, 12 percent of respondents attribute the expected price growth to central bank monetary policies, inflation, and government measures.
In terms of regional variations, economists predict that house price growth in Western Europe (6.4 percent) and North America (7.7 percent) is likely to remain slightly below the global average. On the other hand, significantly higher growth rates are expected in Southern and Eastern Europe, with forecasts of 18.4 percent and 14.9 percent, respectively. South and West Asia, along with Central America, are anticipated to experience even more substantial increases, with predicted growth rates of 25.1 percent and 22.4 percent, respectively.
It is important to note that the survey’s results were based on nominal values, not adjusted for inflation. As Philipp Heil, a researcher at Ifo, clarifies, the actual growth rate is expected to be lower than the nominal values indicate.
Overall, the experts’ outlook suggests a promising future for the global real estate market, with strong demand and various economic factors fueling the anticipated price growth in the coming years.
Source: remspace.cz
