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COVID-19 sparks highest global housing price hike in nearly 30 years in OECD: FT Updated: 2021-08-03 13:39:57 KST

The pandemic has triggered the biggest spike in global house prices in nearly three decades, reviving economists' concerns over its potential threat to financial stability.
According to the Financial Times, annual house price growth across 40 OECD member-states hit 9.4 percent in the first quarter of 2021.
During the same period, only three countries experienced real-term price declines, with the smallest margin since data was first compiled in 2000.
Data also suggests that house prices continued to increase in the second quarter as well, with the U.S. witnessing its fastest annual rate in nearly thirty years in April.
Strong growth persisted in South Korea, Britain, New Zealand and Canada as well.
In South Korea, house prices rose an average of more than 26 percent over the last 12 months in the country's nine major regions, including Seoul, Gyeonggi-do Province, and Busan.
The Financial Times quoted economists who explained that low borrowing costs made home purchases more affordable.
In addition, the article also pointed to the fact that many households, especially those who are better off, accumulated large amount of savings during the early stages of the pandemic as prolonged lockdowns limited their spending.
At the same time, it adds people preferred to move to bigger houses, as they had to spend more time at home due to anti-virus restrictions.
While house prices growth can be a positive factor in the short term, as property owners feel richer and spend more due to the valuation of their assets, economists warn it could lead to an unsustainable boom long-term, especially when it's accompanied by strong credit expansion.
Kim Hyo-sun, Arirang News.
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