If you’re looking to buy a home in Denver right now, you are probably feeling—if not more than a little—frustrated with Colorado’s housing market. Home prices continue on their upward climb; the average home price topping $400,000 for the first time ever in April. Many would-be homebuyers who have to continue renting are watching rental rates increase as well.
To offer a little perspective, we took a look at a few housing markets around the world. As the saying goes: it could be worse.
Denver’s housing market pales in comparison to Vancouver's where the average price of a detached, single-family home was a record $2.23 million in May, an increase of more than 19 percent from a year earlier. Greater Vancouver has experienced a price surge as well, with the average price reaching a record high of $1.42 million in May.
The interest rate on a mortgage in Canada is historically low right now, which is fueling demand and driving up prices. But, even cheap money has to be paid. The Vancouver Real Estate Board’s affordability index shows that the share of household income that goes to mortgage, property tax and utility payments is around 35 percent, the highest it’s been in 20 years.
To rent a flat in Sweden, you must register for the local municipal housing queue (bostadskö). Once you are up, you sign a first-hand contract with the owner of the building. In many cases, these contracts last indefintely. However, large cities like Stockholm can have a wait time up to 20 years, especially for those trying to live near the city center or public transportation. The total number of registered applicants is now almost 500,000! In fact, some people even put their new-born children in the housing queue.
Buying a home in Sweden has its perks. Homebuyers are allowed to purchase a house and never actually repay the full mortgage, just paying the interest each month. Rather than build equity in their homes, most buyers count on their properties appreciating so they can make a profit when they sell. It sounds pretty good, but this repayment system has come under recent scrutiny, because many believe it is creating a housing bubble that will eventually burst.
Hong Kong, China
Hong Kong is one of Asia’s wealthiest cities, but skyrocketing home prices and extra long queues for affordable housing have forced many to live in actual cages. These 6 ft. by 2.5 ft cage homes are made from wire mesh and stacked on top of one another in run-down apartment buildings. Many families have been forced to take up residence in old factories or share apartments subdivided into tiny cubicles.
This is because investors are flooding the housing market with money and packaging and marketing flats as luxury properties, rather than homes for the city's working-class families. Some developers even hoard land and flats to create the illusion of a shortage and drive up prices. Several reforms are in the works to regulate the market and create affordable housing for Hong Kong's middle class, but more than 100,000 people still live in this type of inadequate, make-shift housing, according to the Society for Community Organization, a social welfare group.
So don't get discouraged, just contact us to learn more about how we can help you buy or sell a home in Colorado.