BIS residential property price statistics, Q1 2021
Key takeaways
- Global shelter inflation strengthened further in the first quarter of 2021: worldwide real property prices increased by 4.6% year on year, up from 4.1% in the fourth quarter of 2020 and 1.1% a year before.1
- This rise was particularly marked in advanced economies, by 7.3% on average, especially in comparison with the 2.5% registered for emerging market economies.
- In real terms, global house prices now exceed their immediate post-Great Financial Crisis by 22.4% on average.
- The situation in those economies where sub-national data exist suggests that since the start of the Covid-19 pandemic house prices have increased less in major cities compared with other parts of the countries.
Summary of latest developments
Global real house prices rose by 4.6% year on year in aggregate in the first quarter of 2021, representing the fastest growth rate recorded since the Great Financial Crisis (GFC) of 2007–09. This growth was particularly strong in advanced economies (AEs), 7.3% on average. Prices rose more moderately in emerging market economies (EMEs), by 2.5% on average – with notable differences across regions: they increased by 7.0% in central and eastern Europe, 3.0% in Latin America and 1.5% in emerging Asia, but remained flat in the Middle East and Africa (+0.8%).
In real terms, global house prices now exceed their immediate post-GFC average by 22.4%, and by 29.2% and 17.1% for AEs and EMEs, respectively (Graph 1 and Table 1). Among the G20 economies, real prices have risen markedly – by more than 40% – over the past decade in India, Canada, Germany, and the United States. At the other end of the scale, they remain well below their post-GFC levels in Italy and Russia, by around 20% and 40%, respectively (Graph 2).
Advanced economies
In aggregate for the group of AEs, real residential property prices soared by 7.3% year on year in Q1 2021, compared with 2.3% one year ago. This confirms the significant acceleration observed since the beginning of the Covid-19 pandemic (Graph 1, blue line). Prices grew rapidly in the United States (+10%), the United Kingdom (+8%), Canada (+7%) and Australia (+6%) and less so in Japan (+4%) (Graph 3). Double-digit house price growth was recorded in New Zealand (+19%) and Denmark (+14%).
In the euro area, real year-on-year house price inflation was slightly more subdued (+5%), with significant variations among the member states. House prices remained strong in the Netherlands (+9%), Germany (+8%) and France (+5%). But they flattened further in Italy (+1%) and Spain (+0%) (Graph 4).
Emerging market economies
In contrast with AEs, real residential property prices have been growing moderately since the beginning of the pandemic. They rose by 2.5% year on year in the first quarter of 2021, compared with 0.1% one year before.
House price inflation remained moderate in emerging Asia (+1.5%), with significant heterogeneity across countries. Prices accelerated in Korea (+9%) and China (+3%), while they remained stable in Indonesia and kept falling in India (–2%) and the Philippines (-8%) (Graph 5).
Real house inflation was slightly stronger in Latin America in aggregate (+3.0% year on year), with strong price growth recorded in Brazil (+5%).
Turning to central and eastern Europe, real prices expanded by an average of 7% year on year, led in particular by their surge in Turkey (+14%). House price inflation remained strong in the Czech Republic (+10%) and Russia (+5%) (Graph 6).
Box
Regional house price developments during the Covid-19 pandemic
Anecdotal evidence suggests that demand for housing may have shifted towards suburban and rural residential properties and away from the largest cities during the pandemic, reflecting the impact of several potential factors, such as lockdowns, restrictions, social distancing rules and home office arrangements developed to adapt to the consequences of the pandemic. Preliminary data suggest that this shift has started to be reflected in terms of regional differences among house price developments observed in a number of countries. 
The BIS has recently expanded its detailed residential property price data set to also cover regional data for several countries. 
As a result, sub-national house price indicators are now available for most of the 60 jurisdictions covered, though with varying scope. For some jurisdictions, the regional breakdown is limited to the capital and/or the largest city. In other countries, time series are available for several big cities in parallel, or composite indicators have been developed to show price developments in specific areas, such as big and/or medium-sized cities or urban versus rural areas. In several cases, the detailed BIS data set also includes breakdowns by property vintages (eg new or existing dwellings) or types (eg single detached houses, town houses, flats). Lastly, indicators for a few countries are compiled by various alternative sources providing complementary information.
Regional information available in BIS statistics shows that since the outbreak of the Covid-19 pandemic housing inflation appears to have been less strong in capital/biggest cities compared with the other parts of the countries. Among the largest 21 jurisdictions covered, real house price inflation was lower in the capital/biggest city in 11 countries, and higher in five. This seems particularly evident in Korea and the Netherlands (with a difference of more than 5 percentage points among the various rates observed), Turkey (4 percentage points) and, to a lesser extent, France and the United States (2 percentage points in both). In Mexico and Malaysia, real house prices have risen slightly in the whole country but have fallen in the capital city, while in the Philippines they have fallen more rapidly in the capital region. In Japan, however, house prices appear to have expanded slightly more rapidly in Tokyo than in the whole country, a situation also observed in Spain (Graph A)).
These very recent developments appear to be in contrast with longer-term house price movements. When looking at the entire post-GFC period, real residential property prices have increased more in the capital/main cities than in the whole country in most jurisdictions. 
This long-term trend has been particularly marked in France, the Netherlands and Mexico, and was also noticeable in Japan and Turkey (Graph B), while Korea and the United States have represented notable exceptions.
Comparison of national and regional data faces important limitations, reflecting two main factors. First, regional house price data are still scarce and, when available, sub-national information is often limited to the capital or the largest city. Second, regional data may come from a different source and/or cover different market segments than countrywide indicators; this appears to be particularly the case for the BIS data collected on Korea and the United States. For the list of recently added series, see: www.bis.org/statistics/pp/newseries.htm In 13 of the 18 jurisdictions covered in the BIS sample since the GFC, real house prices have increased more in the capital/biggest city then in the rest of the country.
1 Real residential property prices refer to nominal residential property price indicators deflated by the consumer price index. Global aggregates are weighted aggregates of selected AEs (Australia, Canada, Denmark, the euro area, Iceland, Japan, New Zealand, Norway, Sweden, Switzerland, the United Kingdom and the United States) and EMEs (Brazil, Bulgaria, Chile, China, Colombia, Croatia, the Czech Republic, Hong Kong SAR, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Morocco, North Macedonia, Peru, the Philippines, Poland, Romania, Russia, Singapore, South Africa, Thailand, Turkey and the United Arab Emirates), based on PPP exchange rates.