Event Coverage
Global Markets Not Fully Recovered from Pandemic
California Association of REALTORS® Deputy Chief Economist Oscar Wei told 180 members who attended Tuesday's "2022 Global Housing Market Outlook" that compared to the U.S., many global markets have not fully recovered from the pandemic. Housing material shortages continue to limit activity and their tight labor market has slowed new construction. Low affordability is an issue in many markets overseas, and geopolitical tension has led to volatility in mortgage rates.
"The world is already feeling economic impacts of the Russia-Ukraine conflict," said Wei. The U.S. and other countries are experiencing higher oil prices, more inflation, financial market turbulence, and interest rate volatility which may slow economic growth.
Oil prices have jumped in recent weeks to levels unseen since 2014, said Wei. Russia is an energy superpower, producing 9.7 million barrels per day last year. That is second only to the U.S. and amounts to more oil than Iraq and Canada produced combined. Russia is also the world's largest supplier of wheat, and together with Ukraine accounts for nearly a quarter of total global exports.
Wei indicated in the third quarter of 2021, home prices in nearly half of global markets were up 10 percent from the previous year. The average annual price change across 56 countries/territories was 9.4 percent; 27 markets registered double-digit price growth, up from 18 in Q2 2021. New Zealand (21.9%), Australia (18.9%), U.S. (18.7%), and Canada (17.3%) were among the top 10 with year-over-year price growth rate. Price growth was smaller in Asia, with Hong Kong (3.8%), Mainland China (3.2%), and India (0.1%) experiencing minor price growth. Malaysia and Morocco experienced price declines.
Economists predict home prices will continue to grow in most countries but at more moderate paces, said Wei. A global poll conducted by Reuters late last year found respondents in most countries believe housing affordability will get worse in the next two to three years as many countries struggle with a supply issue, high prices, and inflation.
According to the National Association of REALTORS® 2021 Profile of International Transactions in U.S. Residential Real Estate, during April 2020-March 2021, the largest share of international buyer purchases came from Canada (8%), Mexico (7%), and China (6%). The United Kingdom and India tied at 4 percent.
California is the second destination state for foreign buyers, accounting for 16 percent of all international purchases. Florida is first at 21 percent. Other states where international buyers purchased property were Texas (9%), Arizona (5%). New Jersey and New York tied at 4 percent.
Foreign buyers from Canada preferred properties in Florida, Arizona and California. Buyers from Mexico preferred properties in Texas, California and Colorado. Buyers from China continue to prefer properties in California. Those from India also prefer California, and most buyers from the United Kingdom prefer Florida.
In California, the number of international buyers bounced back, up 4.9 percent from 2020. Wei believes this percentage will come down to around 3 percent this year because COVID-19 continues to be an issue in China.
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