House prices across the world’s tech hubs are 20% higher than local averages as employees from the likes of Apple, Amazon, Google and Facebook scramble for space, according to analysis from Bidwells.
Bidwells’ study of 30 of the world’s most prominent global cities containing well-known tech hubs and the highest-ranked universities, found house prices across those 30 cities grew by 61.3% on average between Q4 2009 and Q3 2018, compared to local national averages of 40.5%.
Cities known for being centres of tech growth – such as San Francisco or Berlin – saw average house price growth of 67.5%. This compared with an average house price growth of 65.8% in cities with a top 50 global university.
San Francisco, which has the headquarters of Facebook, Google and Netflix nearby, has seen house prices rise by 113.7% since 2008, while Seattle, which houses Amazon and Microsoft HQs, has seen prices increase by 74.3%.
In Cambridge, where Amazon and Microsoft both have offices, house prices have risen by 73.4%, while in Oxford they have risen by 66.8%.
Bidwells senior partner Patrick McMahon said: “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 a risk of curtailing growth or even a decline in the quality of life, especially in smaller markets with very limited supply.
“Cambridge and Oxford are small cities seeing major booms in their burgeoning tech and research economies off the back of their world-class universities and while they are not yet on the same scale as other major global tech hubs, they could be. We need to start planning for that now.”
The rapid growth in house prices is starting to provoke drastic solutions to curtail growth – from both governments and the private sector.
Microsoft is investing $500m (£379m) into the Seattle affordable housing market to boost supply and affordability, while in the UK, the Wellcome Trust has submitted plans in Cambridgeshire for a major expansion of its Genome Campus in Hinxton, which includes 1,500 homes reserved for campus staff.
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