1H 2021 price index across the world is positive. Possible?
Actually I have written a few times but let me repeat on why property price increase is possible even when it seems that Covid-19 has caused people to lose jobs. The economy depends on the people who continues to earn and continues to spend. They buy goods and services. Briefly, economic activities depend on the employed (whether employed by people or they are business owners).
This is why people kept wondering why economy is growing, prices are growing but the unemployment is growing at the same time? That’s why it’s important to go back to the basics. More people unemployed means more people are not earning and income and could not buy any goods and services.
When it comes to property price for example, this will definitely depend on the ones who could buy a property. They are the employed. Hope everyone understands. Now, let’s look at what Savills World Cities Index is showing for the 1H 2021. Briefly, it’s positive.
The chart below by Savills Prime Index: Global Cities shows the world (cities which they track) and it includes Kuala Lumpur. In general, the half year price index change is close to 4%. In other words, we can say that the property price is generally moving upwards. In 2H 2020, which we could also say was considered the peak for Covid-19, the price index barely showed any increase, it’s below 1%. It was negative in both 1H 2020 and 2H 2019. So, can we also say that the prices have bottomed? Your answer is as good as mine.
We can see whether we stand individually at the chart after this.
Conclusion from Savills’ report
Savills say that when international travel returns, it will provide an increased supply of buyers for prime properties in some locations. It says that in Europe and North America, there is a persistence of working from home and this will continue to sustain desire for additional floor-space in properties. All these are supported by the low-interest rate environment. Beyond that there is a sustained economy recovery globally too. If you like, you can refer to the full article in Savills.com here.
Conclusion from kopiandproperty.com
Do note that this report from Savills is an overall picture. It does not reflect enough when it comes to individual cities. In fact one may see that the report says something positive but he may still be forced to sell his property at a lower price than what the market price is.
This is why when it comes to reports, it paints a broader view while we still need to look into the property market price for the type, the location, size and others when we come back to individual properties. Happy noting this positive news around the world.