Istanbul

PETALING JAYA (Dec 15): Turkey has occupied the top spot for the fifth consecutive quarter in the Knight Frank Global House Price Index by having registered an annual house price growth of 13.9%, said the international real estate firm.

However, Turkey may lose its No 1 position to New Zealand or Iceland in the upcoming quarter, who are recording annual growth of 13.5% and 12.9% respectively, said Knight Frank in the report for 3Q2016.

Overall, prices have risen in 44 of the 55 countries tracked by Knight Frank over the past year, resulting a weighted average rate of 5.3% across the Global House Price Index, the highest rate for two years, according to Knight Frank.

“The main theme remains one of convergence as the outliers continue to fall in number. Three years ago, 22% of countries recorded double-digit annual price growth, only 9% fall into this bracket today,” added the firm.

Meanwhile, the expected slowdown in US house prices in the run up to the Presidential Election failed to materialise. In fact, it has marked a new high for nominal US house prices which have now exceeded their previous peak recorded in July 2006.

“The rise in September of 0.8% month-on-month was the largest monthly rise since August 2013, contributing to an annual increase of 5.5%,” said Knight Frank international residential research Kate Everett-Allen.

In the UK, the British economy is showing some resilience following the Brexit vote in June. Average house prices rose 1.3% in the three months after the referendum and 5.4% in the 12 months to September.

The market remains underpinned by the ongoing fundamentals of undersupply and low mortgage rates, said Knight Frank.

On Asia, the report noted that China’s resurgent prices, which have gone up 9.3% y-o-y, are most evident in its largest cities.

“Here, price inflation has been driven by supply shortages and pent-up demand. Since September, more than 20 Chinese cities have introduced new tightening measures aimed at cooling price growth,” it said.

In Hong Kong, although house prices there are down 5.5% y-o-y, they have accelerated 4.8% between June and September this year.

Back in Malaysia, prices recorded an annual price growth of 5.3%, taking up the 28th spot on the index.

The report noted that affordability concerns have prompted the authorities to act quickly by increasing the stamp duty to 15% for residents and non-residents alike, excluding first-time buyers.

The consensus view is that 2017 will be a bumpy ride both economically and politically, with stimulus coming in the form of fiscal rather than monetary policy.

“That said, low rates are likely to persist in Europe at least, but hikes in the US will result in a stronger dollar with implications for global capital flows and emerging markets,” said the report.

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