New Real Estate Boom Expected as Experts Forecast Significant Price Surge

A new real estate boom is on the horizon, as experts foresee a significant rise in property prices worldwide over the next ten years. According to a joint survey conducted by the German economic institute Ifo and the Institute for Swiss Economic Policy, real estate prices are expected to increase by an average of nine percent annually. In Eastern Europe, this growth is predicted to be even higher.

The global real estate market is set to experience a remarkable upswing, driven primarily by increasing demand rather than supply factors, according to the findings of a comprehensive survey conducted by Ifo and the Institute for Swiss Economic Policy. A total of 1,405 experts from 133 countries participated in the survey, expressing their expectations for the future of the real estate industry.

The driving forces behind the surge in house prices are multifaceted and include rising living standards, higher incomes, population growth, and the growing desire for more living space. The ongoing trend towards remote working, with the popularity of home offices on the rise, is also expected to fuel demand for housing across various regions globally.

Experts highlighted several factors responsible for driving up property prices. Among them, limited production capacity, rising building material costs, and a scarcity of building land were identified by 27 percent of respondents. Additionally, 12 percent of the experts attributed the expected price growth to central bank monetary policies, inflation, and government measures.

Regional variations in house price growth are anticipated, with Western Europe (6.4 percent) and North America (7.7 percent) likely to experience growth rates slightly below the global average. On the other hand, Southern and Eastern Europe are expected to witness significantly higher growth rates, with forecasts of 18.4 percent and 14.9 percent, respectively. Meanwhile, South and West Asia, along with Central America, are projected to experience even more substantial increases, with predicted growth rates of 25.1 percent and 22.4 percent, respectively.

It’s essential to note that the survey’s results were based on nominal values, not adjusted for inflation. Experts clarified that the actual growth rate is expected to be lower than the nominal values suggest.

Overall, the experts’ optimistic outlook indicates a promising future for the global real estate market, with robust demand and various economic factors driving the anticipated price growth in the coming years. Investors, developers, and homeowners alike can look forward to a potential real estate boom, presenting new opportunities and challenges in the dynamic landscape of the property market.

Article by Prague Forum

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