Global wealth accumulated by households rose by $28.7 trillion dollars in 2020.
A lot of that money has gone into equities and cryptocurrencies, Louis Vuitton handbags and art works. But most of all, people have poured money into buying bigger and better houses.
The phenomenon is global. US median house prices up 23.6% in the year to May 21. Double digit growth in Sweden, South Korea, Canada, Australia and the Netherlands. Even Japan and Italy have had house price rises, despite their ageing populations.
Central banks have fuelled the massive rises in house prices around the world with the creation of cheap money and low interest rates. Even the NZ central bank added huge amounts of stimulus, despite our very short lockdown. The increase in house prices is not fault of property investors.
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