House prices in the top 50 university cities around the world are on average 25% higher than the national average according to a new analysis of values from 2009 to 2018.
The research from Property Consultants Bidwells found that house prices grew on average 65.8%, compared to a national average growth of 40% with the biggest rise 195.6% in Hong Kong.
This was followed by an increase of 145.8% in Zurich, 113.7% in San Francisco, 98.2% in Toronto, 90.1% in Los Angeles, 89.3% in Vancouver, 76.3% in London, 73.7% in Austin, 73.4% in Cambridge and 66.8% in Oxford.
Bidwells has produced the research to encourage joined up thinking about housing and economic growth and draw attention to Oxford and Cambridge, home to the world’s two highest ranked universities.
The firm says that with supply in Oxford and Cambridge in particularly constrained, house prices look set to continue to rise, which may stifle economic growth as talent finds it more difficult to remain in the cities post-degree, despite the burgeoning science and tech sectors currently spinning out billions of pounds of AI start-ups in the area.
While flourishing universities or tech scenes are themselves only part of house price growth, they are one of a number of factors that drive a successful global city’s economy, it adds.
It also points out that certain US tech cities with strong universities but restricted housing supplies have seen disproportionately large increase in house prices as young millennials flood into cities for work, particularly on the West coast.
‘The downside of a booming global city is that house prices in many of those hubs are becoming so high, due to inflation and migration for work, that there is risk of curtailing growth or even a decline in the quality of life, especially in smaller markets with very limited supply,’ said Patrick McMahon, Senior Partner at Bidwells.
‘Bidwells has conducted this research to show what might happen to Oxford and Cambridge if we don’t start taking infrastructure and housing provision seriously. They are small cities who find themselves on the global stage off the back of their world class universities,’ he said.
‘We do not want unaffordable housing to stifle further economic growth, or to put off the next wave of global businesses locating in these cities because they cannot attract long term workers. We need to start planning now,’ he concluded.
Bidwells has set out a number of methods that could ease the affordable housing crisis in Cambridge and Oxford such as having allocations in local plans for key worker housing in the affordable mix.
It also suggests designated funding from Homes England to aid development of affordable and key worker homes encouraging science park and other business space providers to look at live/work models and tie ups with big businesses to provide cheaper loans for housing in return for tax breaks as well as encouraging higher density development in sustainable locations, such as next to transport hubs.
Source: Residential - propertywire.com