Global house prices rise 4.3%
The world’s housing markets have improved by 4.3% during 2012 on average – led by Hong Kong, Dubai and Brazil, according to new data.
As well as the annual increase, the Knight Frank Global House Price Index rose by 0.3% on average in the final quarter of 2012. Of the 55 housing markets it tracks, 20 saw prices fall in 2012, down from 25 the previous year.
Europe suffered most, with 19 of the 20 countries that experienced falling prices coming from the continent.
Overseas investors helped boost sales in the top three countries, says Kate Everett-Allen, from Knight Frank’s International Residential Research department.
Kate has told OPP Connect, “The key driver of the Hong Kong market has been the demand from mainland Chinese investors. This, set against limited supply (the Government has taken over the supply of land from developers) has pushed prices higher.
“However, the new round of cooling measures announced at the end of February will curtail growth in 2013, we expect prices to rise by 5% or less in 2013.
“Foreign demand is also proving influential in Dubai but more so at the prime/luxury end of the market. In terms of the number of investors and the volume of their investments, India, Pakistan, the UK, Iran, Russia and Saudi Arabia rank highly.”
Mainstream property prices in Hong Kong rose on average by 23.6% in 2012, with supply lagging, demand has surged from mainland Chinese investors keen to get their slice of Hong Kong’s real estate prices, says the report.
But, if the Hong Kong Government’s latest efforts to increase stamp duty is a measure of their determination to cool price growth Knight Frank expects a return to more muted growth in 2013.
Properties worth below HK$2 million now incur a stamp duty of 1.5%, while the rate for properties worth above HK$2 million has been doubled, to up to 8.5% of the property’s value.
Prices in Dubai grew 19% in 2012. “For several years the ‘yo-yo’ of the rankings, the Dubai market is finding its feet. Stalled developments are being resurrected, sales volumes are rising and the level of market transparency is improving, “ says the report.
Heading the list of foreign property investors in Dubai is India with 3,514 investors placing AED8,652m. Then comes Pakistan with 2,727 investors placing AED3,908m. The UK has 2,547 investors, Iran 1,671, Russia 894, USA 667 and Canada 620.
In America in 2012 property prices grew 7.3%, the largest annual rise since 2006. In 2012, 19 of the 20 US cities in the S&P/CaseShiller Index posted annual price gains, but tight lending still has the capacity to curb the speed and strength of the recovery in 2013, Knight Frank warns.
Property in Europe generally showed price falls, but Turkey (up 10.5%), Russia, (up 10.2%) and Austria (up 10.1%) bucked the trend, coming fourth to sixth in the table.
Greece – bottom of the market with a 13.2% price fall in 2012 – Spain and the Netherlands languished in the bottom five rankings for the second consecutive quarter.
Ireland, a long-term resident at the foot of the table looks to have broken free, recording a fall of 4.5% in 2012, compared to a 16.7% decline a year earlier.
The performance of the world’s mainstream housing markets in 2013 will depend on finding some economic stimulus, relaxing lending criteria and instilling buyer confidence, says Knight Frank.
Helped by prices in third-placed Brazil rising 13.7% during 2012, the South America region experienced the strongest growth in 2012, up 8.4% on average.
Mainstream property prices in Asia Pacific rose faster in 2012 than in 2011, increasing by 6.7% on average compared to 2.8% a year earlier.
Taking into account figures since autumn 2008 and the Lehman collapse, Hong Kong again topped the table of price growth, followed by India, Taiwan, China and Israel.
The Knight Frank Global House Price Index, established in 2006, is used by investors and developers to monitor and compare the performance of mainstream residential markets across the world. The index is compiled on a quarterly basis using official government statistics or central bank data where available.