A boom in housing demand during the global pandemic has driven price growth to a 15-year high, according to a report released Wednesday.

The Knight Frank’s Global House Price Index, measuring average home prices across 56 countries and territories, rose 7.3% year over year in the first quarter, the fastest pace since the fourth quarter of 2006.

“A contributory factor to rising house prices globally has been the mass reassessment of housing needs in the wake of the pandemic, whether that's been buyers seeking home offices, gardens or just to be closer to wide-open spaces,” Kate Everett-Allen, head of international residential research at Knight Frank, told Mansion Global.

“The demands on the home have increased in lockdowns and homeowners have reflected on where and how they want to live, prompting many to relocate or purchase a second home,” she added.

With a 32% year-over-year price increase, Turkey led the rankings for the fifth consecutive quarter. However, stripping out inflation, real house prices rose around 16% annually in the country.

“Turkey’s somewhat of a red herring,” Ms. Everett-Allen said. “Sales declined in 2020 but prices increased due to inflation and the weak Turkish lira. Construction costs are also rising due to tight supply chains.”

A total of 13 countries, primarily developed nations, registered double-digit annual price growth. Those include New Zealand (22%), the U.S. (13%), Sweden (13%), Austria (12%), Canada (10.8%) and the U.K. (10.2%).

“Homeowners in these developed nations have also seen some of the largest rates of accrued savings. For some, this may mean they now have a deposit for their first home, or enable existing homeowners to upgrade,” Ms. Everett-Allen said.

For example, the Bank of England estimates that U.K. householders have amassed some £250 billion (US$354 billion) in savings since the start of the pandemic, she said.

Wary of potential housing bubbles, some countries have adopted market-cooling measures to curb the rapid price growth since January. China, New Zealand and Ireland introduced higher stamp duties for investment properties.

China is also considering a national vacancy tax or property tax, as is Canada.

Home prices in China, excluding Hong Kong, rose 4.3% year over year in the first quarter, while Ireland home prices increased 3.7% during the same period.

However, not all countries experienced a housing boom in the first quarter. Four countries saw their housing prices drop from a year ago, including Malaysia (-0.9%), Morocco (-1.2%), India (-1.6%) and Spain (-1.8%), according to the report.

** image courtesy of boutiquesmallhotels.com