Businesses across the world went downhill during COVID-19. However, the global housing sector recorded a growth of 8.4% in 2021 compared to 2% of 2020.
According to the latest edition of the annual ‘Wealth Report’ by international real estate group Knight Frank, this is the highest growth recorded in 14 years. The report also tracks the spending as well as the investment trends among high net worth individuals around the globe.
According to Kate Everett-Allen, Knight Frank’s head of international residential research, during the time of lockdown in 2020, housing markets took a beating for months. However, by 2021, the housing sector turned ‘red hot’, especially at a time when vaccines started rolling out and economic uncertainty receded.
Out of all the 100 property hotspots which were tracked by the company’s Prime International Residential Index, only seven of them recorded a drop in price in the year 2021. This index tracks only the most desirable and some of the most expensive properties in a specific location. All of this comprises the top 5% of each market by value.
The best performing housing market was that of Dubai which recorded a 44.4% increase in prices. The country became an increasingly desirable investment destination amongst the people because of two reasons— one, an attractive tax structure and its central location. Moscow came second with a growth of 42.4%. Everett-Allen has credited this to Russia’s mortgage subsidy and tight housing supply.
Although it is believed that this boom might be short-lived because of the sanctions Russia is facing from the Western governments.
Cape Town on the other hand was ranked as one of the worst-performing markets last year.