LONDON: Led by Hong Kong, average global house prices rose 6.6% in the year to March — the highest rate of growth since the second quarter of 2010 (2Q10), according to Knight Frank’s global house price index for 1Q13.
Despite the efforts of policymakers to curb increasing property prices, Hong Kong recorded the largest rise of 28% year-on-year (y-o-y), while prices in China jumped 10.7% — the highest in 1Q and 23.8% y-o-y. Some 35 of the 55 housing markets monitored by Knight Frank saw an increase in mainstream property price in 1Q. The index now stands 14.7% above its recessional low in 1Q09, said Knight Frank.
Property prices in all world regions, except Europe, increased in 1Q with the Middle East performing best, rising 10.6% on average. Aside from Japan and South Korea, all countries that registered negative growth in the 12 months to March were from Europe. Greece, Hungary and the Netherlands ranked the lowest overall, with prices falling by 11.8%, 9% and 8.3% respectively.
However, Knight Frank noted it’s not all bad news in Europe. Prices in Ireland dropped by 3% in 1Q compared with a 16% decline a year ago. In the UK, prices rose by 0.2% in 1Q and stood 8.9% above its low in 1Q09.
South Africa and the US performed strongly, recording price increases of 11.3% and 10.2% in 1Q and up from — 3.2% and —1.9% a year ago. Knight Frank linked South Africa’s performance to an increasingly wealthy middle class who are tapping into the rising confidence of the wider African continent and who are keen to get on the property ladder. Prices in the US have been on the rise for 12 consecutive months, boosting consumer confidence which hit a five-year high in May.
Knight Frank noted that while relative stability has returned since 2Q12, the patterns of performance still do not fully replicate the pre-crisis market profile of early 2008.
This article first appeared in The Edge Financial Daily, on June 28, 2013.
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