Diksia.com - A substantial surge in real estate prices worldwide is on the horizon, as per the latest findings from the Economic Experts Survey (EES) conducted jointly by the esteemed ifo Institute and the Swiss Economic Policy Institute.
These economic gurus foresee an average annual increase of 9 percent in real estate prices over the coming years.
This soaring trend can be attributed to various factors, including escalating demand, improved living standards, population growth, and shifting work patterns.
Moreover, certain regions are predicted to witness even more remarkable growth rates.
In the dynamic real estate market, an amalgamation of factors is driving the notable price hikes.
Among the respondents, 37 percent pinpointed the surge in demand, propelled by better living standards, increased incomes, population growth, and the desire for more spacious living areas.
The current transition towards remote work is also a substantial influencing factor, igniting the demand for comfortable homes.
On the other hand, 27 percent of experts identified supply-related constraints as contributors to the surging real estate prices.
These constraints include limited production capacity, rising costs of construction materials, and a scarcity of available building lots.
Furthermore, 12 percent of respondents attributed the price hikes to monetary policies, inflationary pressures, and government initiatives.
As for regional predictions, varying growth rates are expected across the globe.
While Western Europe and North America are anticipated to witness real estate price increases below the global average, with projections of 6.4 percent and 7.7 percent, respectively, Southern Europe and Eastern Europe are poised for significantly higher growth rates at 18.4 percent and 14.9 percent, respectively.
Even more strikingly high real estate price increases are anticipated in South Asia (25.1 percent), West Asia (22.4 percent), and Central America (24.4 percent).
However, it is crucial to bear in mind that the figures provided represent nominal growth rates, and the actual growth rates are likely to be lower.
Drawing insights from historical trends, researchers expect that the real estate price growth rates will be more modest than the projected figures.
For instance, in the UK, house prices have already soared by over 67 percent in the past decade, indicating a continuation of a similar trend. Similarly, in the US, the figure stands at 112 percent, while in France, it reaches 25 percent.
The comprehensive survey garnered valuable input from 1,405 economic experts representing 133 countries. The data was collected between June 14 and July 2, 2023.
With demand reaching unprecedented heights, work patterns evolving, and economic landscapes shifting, the global real estate market is on the cusp of a remarkable transformation.
As these predictions manifest into reality, policymakers, investors, and prospective buyers will need to deftly navigate the evolving market dynamics and adapt to the changing realities of the real estate landscape.
Source: Helsinki Times
