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Knight Frank Global House Price Index

21 March 2016

Knight Frank Global House Price Index

Global house prices defy economic climate in 2015

21 March 2016, Malaysia – Knight Frank, the independent global property consultancy, today launches theGlobal House Price Index* for Q4 2015. The index monitors and compares the performance of mainstream residential markets in 55 countries across the world.  The index increased by 3% in 2015, up from 2.3% in 2014. Concerns over the global economy in 2015 failed to dent buyer confidence; instead the lingering low interest rate environment influenced sentiment.

 

Results for Q4 2015

 

·         Forty-three of the 55 housing markets tracked in our Global House Price Index saw prices rise, up from 10 countries in the aftermath of the Lehman’s collapse in September 2008 (please see Figure 1 which compares the shift in global house prices starting from Q2 2008, the latest global house price index available at the time of Lehman’s collapse).

 

·         Turkey leads the rankings with prices rising 18% during 2015. Increasingly viewed as a safe haven for Middle Eastern investors, Turkey is bridging East and West whilst also seeing strong population growth.  

 

·         Belgium and New Zealand are the least affordable countries when house prices are compared to incomes.  

 

·         Ukraine and Greece were the weakest housing markets in 2015, recording prices falls of 12% and 5% respectively. 

Nicholas Holt, Head of Research for Asia Pacific, says, “2015 saw Asian mainstream residential markets record only 1.9% annual price growth, lower than the global average of 3%. While a number of markets experienced positive growth, Taiwan and Singapore, which have seen negative growth for a number of quarters, were joined by Hong Kong this quarter, which saw its residential market decline by 3.7% in Q4 2015.

 

“While long-term growth prospects remain positive, the continued economic uncertainty in the region is likely to weigh on housing market sentiment in the near term.”

 

Kate Everett-Allen, Partner, International Residential Research, Knight Frank, says, “Although house prices in Hong Kong increased in 2015, the rate of growth has slowed significantly from 17% in the year to September to 7% in the year to December 2015. The slower rate of growth is attributable to rising supply (more than 11,200 homes were completed in 2015), as well as China’s financial market volatility and the expectation of increasing interest rates.”  

 

Data from China’s National Bureau of Statistics shows house prices rose marginally in 2015 (0.4%) having reached their peak in the first quarter of 2014. Cities such as Shenzhen and Shanghai continue to outperform the national average due in part to favourable government policies and strong demand in first-tier cities.  

 

Australasia was the strongest-performing world region in 2015, buoyed by the strong performance of New Zealand and Australia, both of which saw annual price growth in excess of 10%.  

 

Housing affordability, or the lack of it, is rising up policymakers’ agendas worldwide. According to the latest data from the OECD, which measures house prices against incomes for 24 of its 34 members, Belgium and New Zealand are currently the world’s least affordable markets, whilst home ownership is most accessible in South Korea and Japan.  

 

Everett-Allen adds, “Our outlook for 2016 is muted. We expect the index’s overall rate of growth to be weaker in 2016 than in 2015. The global economy is experiencing a potentially dangerous cocktail of low oil prices, a strong dollar and a continued slowdown in China.” 

 

END

 

*Weighted by Purchasing Power Parity

To download the report, please visit:

http://www.knightfrank.com.sg/research/global-house-price-index-q4-2015-3606.aspx