Global House Prices, The Office & Other News

September 17, 2021
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Global House Prices

Global house prices rose at the fastest pace since 2005 during the second quarter as the pandemic-induced boom rolled on. Prices in a third of the 55 countries and territories we track are climbing at a rate of more than 10% (see chart).

This isn't a global surge, however. The largest rises are mostly confined to advanced economies where support measures have protected jobs and enabled significant savings among consumers - see New Zealand (25.9%), the US (18.6%), Australia (16.4%) and Canada (16%).

Kate Everett-Allen notes early signs of softening in some key markets.  In the US, mortgage applications have dipped and the share of households thinking now is a good time to buy also declined. The prospect of interest rate rises in markets such as New Zealand, the US and the UK is also likely to weigh on buyer sentiment in the medium term.


The office

Interesting numbers from Metrikus reported in Property Week suggests office occupancy has reached 87%, the highest level since the world decamped to work from home in March 2020.

It's unclear which definition of occupancy we're working with, whether it's buildings occupied or number of employees sitting at desks. By the latter definition, most offices were often about 60% occupied before the onset of the pandemic. 

As Lee Elliott notes in our House View, ten of our 15 global gateway markets still report office occupancy below half of typical levels. Momentum is indeed building but there is still considerable road to run.

In other news...

It is unlikely that the current road brings a return to pre-pandemic levels of occupancy. Our re-entry into the office will instead be more fluid and flexible, reflecting a real shift in working styles. Meanwhile a flight to quality underway will intensify - 70% of office space committed to last quarter was new or fully refurbished, much higher than has historically been the case.

Elsewhere - US inflation slows sharply, but consumers are still spending, democrats table a bill for a global pact to curb corporate tax havens, investment banks accelerate efforts to automate 'grunt work', and finally, record profits at MJ Gleeson.

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