What do Sweden, Denmark, Russia, and the United States all have in common?
A penchant for vodka. But that’s irrelevant to the topic at hand; we’re here to talk about real estate.
The common thread linking these unlikely bedfellows is only one year old, born amidst a pandemic. According to Financial Times data, these four countries experienced the greatest house price growth globally between mid 2020-21.
With all the hysteria around Australia’s soaring property market, you’d think we’d at least have landed the fifth spot, right? Yeah, nah. That went to South Korea. Then after that, Canada. In fact, Australia didn’t even make the top 10 when it comes to the latest year-on-year increase in house prices—we’re 15th, sandwiched between South Africa and Hong Kong.
In a way, it’s reassuring to know that it’s not just us scratching our heads at each week’s property sales reports. Housing booms have been triggered the world over by ultra-cheap interest rates and government Covid-related stimulus measures.
In Sydney, house prices have already risen 15.1% since the beginning of this year and have seen upwards of a 20% increase since 2020, with a median value of $1.2M. In Melbourne, values are up 9.4% since January 1, with a median house price of around $908K. Still, nationally, Australia has only seen a rise of just over 4%, which is low in comparison to what many other countries have experienced.
In Sweden, AKA property boom HQ, house prices have increased by an eyewatering 20% year-on-year, and apartments by 13%—the first time in history that house prices have increased by double digits within 12 months in all of Sweden’s biggest cities—Gothenburg (19%), Malmö (23%), and Stockholm (24%). As per data last month, the median house price in Stockholm was around 7.4 million kroner, roughly $1.75M AUD, with a national average of 4.3 million kroner, or $913K AUD.
Denmark’s property boom has seen the median house price rise by over 15.7% since this time last year, while apartment and vacation home prices have soared by 17.9% and 26.4% respectively.
In Russia, despite low interest rates, their dramatic 13.8% growth came as a surprise, with Danske Bank’s Chief Economist remarking that “Historically speaking, pronounced price increases during a time of great economic uncertainty is a very unusual trend.” In 2019, Moscow’s house prices increased by less than 0.51% before increasing by 16% y-o-y in 2020. Meanwhile, in St. Petersburg, house prices rose by 20.07% last year.
Finally, in the US, where the latest y-o-y data shows a median house price increase of over 13%, certain cities have experienced similar growth to Sydney and Melbourne. For example, in Albany, NY, the increase has been over 20%, with median homes now at around $236K USD. Furthermore, the US housing market is reportedly millions of homes short of buyer demand.
Wherever you are in the world, one thing’s for sure—this Covid-era price boom has made housing affordability and its generational effects as hot a topic as the market itself.