Statistics for recent years show that house prices around the world continue to rise. Even the pandemic has not affected the stable growth of property prices in more than 90% of countries. But not everyone is in a hurry to invest in the purchase of apartments and houses. Although the opinions of experts on whether to buy real estate in 2022 are mostly optimistic.
Reasons for the rise in property prices
The reason lies in the decline in interest rates on loans. This leads to an increase in demand, but there are no more available offers on the market. Sellers do not have the ability to quickly sell housing until they acquire a new one.
Due to restrictions on movement and travel, local residents began to seriously consider purchasing new real estate as an office at home in order to improve working conditions.
The list of countries with the fastest growth in property prices according to the latest indicators (descending) according to the latest Global House Price Index from Knight Frank:
- South Korea
- New Zealand
- United States
Those who are wondering whether to buy real estate in 2022 need to know about places where the situation is different. In countries such as Spain, Hong Kong, and Malaysia, the cost of housing has dropped altogether. According to experts, the coronavirus vaccine will restore the market and return the previous figures.
Based on the forecast for 2022, the situation is expected to normalize and return to the previous state of the real estate market.
In the near future, due to the lifting of restrictions on movement and travel, international buyers will again appear on the market, which may lead to an increase in property prices. Everything here will depend on the accompanying factors.
Forecast for real estate prices in 2022
The global epidemic and quarantine have slightly affected the value of real estate, at least in the capital. During the isolation, the profits of Russians fell significantly, so the previous demand for housing will not return soon.
Governments of different countries provided significant support to developers so that the crisis bypassed them. For the most part, this applies to those who fell under the preferential mortgage program with a low-interest rate. In the near future, we should expect an increase in the population’s demand for primary housing, which is due to the possibility of obtaining a loan on a preferential basis. Secondary housing will fade into the background and new buildings will be in the spotlight.
Provided all calculations are correct and no other disasters or upheavals are expected, growth could peak. If we compare the current circumstances with the crisis of 2014, we will find a similarity in the decline of the secondary market, while the primary one will hardly suffer. Analysts explain this by the introduction of preferential state mortgage programs.
The recovery of the secondary market may take more than a year. Private entrepreneurs are forced to reduce the prices of their assets, make discounts and make concessions. Therefore, no visible price changes should be expected. On the other hand, the number of deals will decrease, since the buyers ‘requests will not coincide with the sellers’ offers. Full stabilization of the secondary market is expected in 2022.
Analyzing whether it is worth buying real estate in 2022, note that suburban housing, which has sharply increased in demand at the very beginning of events, was in the most advantageous position during the pandemic. People began to seriously think about purchasing such housing on a permanent basis: it is still better to carry out insulation in the fresh air than in stuffy boxes of apartments. Especially on the seashore as when buying, for example, Turkish homes. Based on this, the opinions of the experts are unanimous: country houses and cottages will be at the top of the sales lists for a long time.
What analysts predict in 2022
Regarding whether it is worth buying real estate in 2022, experts argue that the economic recovery after the pandemic will not be complete without the decline of the entire market, which came by the end of 2021. In their opinion, an improvement in the situation should be expected no earlier than 2022. The figures will be lower than expected in the near future, which will lead to a revaluation of assets. The global market recession will be the solution to the problem.
If we talk about what will happen to prices, due to the lack of additional sources of market stimulation, many states will set zero interest rates. As part of the forecast for real estate prices for the next year, analysts predict the yield of some types of acts below the minimum. One of the main reasons for this unfavorable calculation is the pandemic, which has led to a fundamental change in commercial real estate models.
Condition of prices for new buildings
Due to the introduction of preferential mortgage programs, the cost of new buildings has increased, because loans have become more affordable for the population. Since they decided to leave this program, the position of new buildings will not change in the near future. If the program is closed, there will be no crisis in the real estate market, because those to whom the terms of the mortgage were really important bought housing even before it was approved. Now is the time to take advantage of the situation and make your plans a reality, slowly. Analysts believe that it was concessional lending that promoted primary housing on the world market.
Experts expect a quick decline in demand for new buildings, but the situation will not be critical. This will likely lead to a decrease in the number of developers whose projects were less successful.
According to forecasts, the epicenter of price reductions in 2022 will be areas that have recently been replenished with new properties. At the same time, the growth in value will continue for quite a long time. Analysts are confident that if the situation remains unchanged and no new problems are added, prices will rise by another 10%.
Secondary housing prices
The secondary housing market promises to recover after last year’s contraction. That is why strong competition will prevent homeowners from increasing the cost of housing for no particular reason. Buyers are no longer in a hurry to buy real estate for a large sum, only to move in as soon as possible. A stable economy and the availability of alternatives among the abundance of offers allow the buyer to compare all the pros and cons and choose the most profitable.
State of prices for suburban housing
Due to the pandemic, the demand for country houses, summer cottages, and cottages has grown significantly compared to last year’s figures. Buyers are most attracted to homes for year-round use rather than seasonal use. If we turn to the exact numbers, demand has grown by about 20%, which has led to an increase in prices for suburban real estate. People are interested in buying their own independent housing, so they sell apartments in high-rise buildings and move out of town. All this was facilitated by a huge number of various factors, including the pandemic.
Experts believe that the current situation in the suburban housing market is similar to inflating a soap bubble. The factors of influence include the policy of providing maternity capital. But this process will not be endless: by the middle of 2022, the rapid growth in property values should stop.
In general, there is a tendency towards an increase in real estate prices. At the same time, the demand for apartments not only did not grow but also slightly decreased against the background of the coronavirus crisis. Suburban real estate turned out to be the greatest plus because, in conditions of isolation, people began to strive more for free spaces with their own yard and personal plot.