Global house prices increase by 4.6 per cent

AFP PHOTO / KARIM SAHIB

House prices worldwide increased by 4.6per cent in 2017, led by Iceland and Hong Kong, but their rate of growth has slowed while European housing markets are rising up the rankings, the latest global index shows.

Overall some 85per cent of the 59 countries tracked by the Knight Frank global house price index saw mainstream values rise and seven European countries now sit within the top 10 while Russia, Peru and Ukraine registered the weakest growth in 2017.

“The latest house price rankings provide a glimpse as to where the world’s housing markets are in relation to their property market cycles, as the era of economic stimulus comes to a close and rate rises occupy the minds of policymakers in several key western markets,’ said Kate Everett-Allen, head of international residential research at Knight Frank.

She explained that while 2017’s growth of 4.6per cent was lower than 2016’s 5.3per cent, it was still a reflection of steady growth, tied primarily to the fact the global economy registered growth of 3.7per cent in 2017.

“That is not to say there aren’t headwinds. Rising interest rates in the US, UK, and Canada as well as the withdrawal of stimulus is influencing buyer sentiment, and with over 13 countries pegged to the US dollar, further rate rises by the Federal Reserve will have repercussions beyond US shores,” she pointed out.

Indeed, the index’s more moderate rate of growth is reflected throughout the rankings. The gap between the strongest and weakest performing housing market has narrowed from 27 percentage points to 20.

Iceland and Hong Kong still occupy first and second position but their rates of annual growth have slipped from 20per cent to 15per cent and from 18per cent to 14per cent respectively since the previous quarter. Mirroring a trend seen in the prime residential markets, European countries are rising up the rankings.

The Czech Republic and Ireland were in equal third with price growth of 12.3per cent, followed by Turkey at 11.2per cent and Serbia at 11per cent, Hungary at 10per cent, Latvia at 9.5per cent, Bulgaria at 9per cent and Malta at 8.8per cent.

The UK is ranked 24th with annual growth of 5.2per cent, Portugal at 31 with price growth of 4.5per cent, France at 35 with 3.9per cent, Germany at 38 with a rise of 3.6per cent, Spain at 43 with 3.1per cent and Italy close to the bottom at 53 with a fall of 0.8per cent.

At the bottom is Ukraine where prices fell by 5.1per cent, while in Peru they fell by 4.2per cent, in Russia they were down 3perc ent, in Saudi Arabia down 2.2per cent, in Finland down 1.5per cent and in Poland there was a fall of 0.9per cent.

In terms of the world’s largest economies, the US with growth of 6.3% has overtaken China at 5.8per cent. The index report says that in China, although tighter capital controls are limiting cross border flows, policy levers at home are having some success stemming its tide into domestic markets.

The strong performance of the US and Canada at 8.9per cent means North America outpaced all other world regions in 2017, recording average price growth of 7.5per cent. “With a raft of new measures announced to curb Vancouver’s price Inflation and further rate rises mooted we may see Canada shift down the rankings during 2018,” said Everett-Allen



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