Knight Frank has revealed Australia ranks fifth globally in house price increases in its Q3 edition of the Global House Price Index.

Recording an annual year-on-year growth of 18.9 percent, up from 16.4 percent in Q2, the Australian mainstream market has had 8 quarters of uninterrupted positive annual growth in the past two years. The Global House Price Index tracks the movement of mainstream house prices across 56 countries and territories worldwide, and ranks the growth or decline of the surveyed countries.

Knight Frank Australia Partner and Head of Residential, Shayne Harris, says seeing Australia make its way into the top five speaks to how much property values have risen down under during 2021.

“It is interesting to see Australia take out the fifth position globally for the growth in house prices in Q3 of 2021 – the last time we were in a top five position was at the end of 2015, prior to tightened lending restrictions being implemented,” he says.

“The impact that the pandemic has had on our house prices is clear, with Knight Frank data showing that our average annual price growth from 2015 – 2020 was 4.4 percent, which rose to average growth of 9.8 percent since the start of the pandemic. As at Q3 2021, the Australian mainstream market has had eight quarters of uninterrupted positive annual growth, and the market continues to heat up as much desirable stock is in short supply and interest rates remain at historic lows.

“However, we do expect the growth in Australia’s house prices to slow in 2022, perhaps by as much as 10 percent (from 18 percent in 2021 to 8 percent in 2022), as we reach a tipping point for affordability. As we move into 2022, we expect Australians to be influenced by further restrictions of lending, an increase in house listings and different considerations about how they deploy their capital as international travel resumes and some elements of pre-COVID life return.”   

To read Knight Frank’s Global House Price Index report for Q3 in full, click here.