Prime property prices in key global cities up by 4.3% year on year
Prime property prices in leading cities around the world increased by 4.3% in the 12 months to March 2017, led by Chinese cities, the latest global index shows.
The strongest growth was in Guangzhou where prices were 36.2% higher than March 2016 and the Knight Frank index also shows that prices in the world’s tech hubs are outperforming the world’s financial centres.
Beijing and Shanghai also saw strong growth, averaging 26.3% but the index report says that prices in Guangzhou are rising from a lower base and the availability of stock is tighter. It adds that policymakers in the city have been slower to introduce restriction to cool the property market.
Prices also accelerated in Toronto in Canada where new market restrictions are being introduced with values up 22%. As a result an extra property tax has been introduced for foreign buyers, similar to one already in place in Vancouver.
‘Although the world is in a state of political and economic flux at present and inevitably we are seeing a degree of safe haven investment flows into luxury property markets, the index’s upturn this quarter can largely be attributed to China’s cities which continue to dominate the top tier of the rankings,’ said Kate Everett-Allen, head of international residential research at Knight Frank.
Other cities seeing strong price growth include Seoul with a rise of 17.6%, Stockholm up 10.7%, Berlin up 8.7% and Melbourne up 8.6%, which the index report says are all cities with notable clusters of technology businesses.
The report points out that the established financial centres of the world are seeing slower price growth, on average 3.2% per annum, compared with the emerging technology hubs which saw prices rise by 7.4% on average over the 12 month period.
Although prime prices fell 6.4% in London in the year to March quarterly growth has climbed to its highest rate since May 2016, with the report suggesting the city is entering a period of stabilisation.
Asian cities are also recorded more growth with prices up in key cities in the region including a rise of 5.3% in Hong Kong and 4% in Singapore. In March Singapore reduced its sellers’ stamp duty from 16% to 12% which the report says suggests a softening in attitude. ‘But such a move is unlikely to open the floodgates to speculators given the 15% buyer’s stamp duty for foreign buyers remains in place,’ Everett-Allen said.
Two new cities have been added to the index, St Petersburg and Istanbul. In St Petersburg prices were down 2.1% year on year and in Istanbul they were down by 8.3%, the steepest fall in the index.
Other cities seeing prices fall significantly include Moscow, down 7.3% year on year, Zurich down 7%, London down 6.4% and Taipei down 6.3%. Prices were stagnant in Rome and down by 0.9% in Milan, by 2% in both Vienna and Geneva, down 2.6% in Delhi and down by 2.7% in Nairobi.