Global property prices are expected to grow by 9% annually over the next 10 years, with East Africa and South Asia leading the pack with increases of over 20%.
The prediction comes from the latest Economic Experts Survey (EES) conducted by the Munich-based ifo Institute and the Institute for Swiss Economic Policy (IWP).
South America, Eastern Europe, Central Asia, and North Africa are set for increases of 10-15%, while North America, Western Europe, Oceania, and Southeast Asia should see annual price growth of 6-8%.
Strong price differences are particularly evident in Europe. While Western Europe (+6.4%) and Northern Europe (+9.9%) will see moderate increases in the price level of real estate, expectations for Southern (+18.4%) and Eastern Europe (+14.9%) are almost three times as high.
For the DACH markets, the two institutes forecast an average rate of 7.2% a year for Germany, and 6.9% and 4.8% for Austria and Switzerland, respectively.
Economists were asked about the reasons for their house price expectations. Price-driving factors tend to dominate on the demand side compared to the supply side on the real estate market.
Real estate price expectations also depend directly on inflation expectations. The longer central banks can't get inflation under control, the faster house prices will rise.
In the survey, 37% of the respondents cited better living standards, higher incomes, the desire for more living space and population growth as the main factors for the price increase. The trend of working more from home also plays a role.
Limited production capacity, more expensive construction materials and a shortage of construction land were cited by 27%, as the primary motive for the price increase.
One in eight attributed the expected price movement to monetary policy, inflation and government policy.
The EES survey, which ran from 14 June to 2 July, polled 1,405 economic experts from 133 countries.
