More than 121 of the 165 cities tracked by the new index, based on official house price data, compiled by international real estate firm Knight Frank, saw house prices either rise or remain flat in 2015.
Shenzhen property prices increased by 47.5% and more than 22% separates it from the index’s second ranking city of Auckland in New Zealand were prices increased by 25.4% last year.
In 2015 China saw the largest disparity amongst its cities with 50% separating its strongest and weakest performing city housing market. The report points out that first tier cities in China saw strong demand on the back of the relaxation of policy restrictions which boosted market performance. Shenzhen is fast becoming one of China’s key technology hubs, its population of 10 million has an average age of 30.
Budapest, where prices increased by 16.3% in 2015, is the strongest performing capital city within the index. The city’s comparative value, combined with an exclusive investment immigration bond programme for Chinese nationals, has fuelled demand, according to Kate Everett-Allen head of international residential research.
Of the 20 US cities included in the index the strongest growth was in Portland with prices up 11.4% and San Francisco up 10.4%. Washington DC the weakest with price growth of 1.7%.
Although none of the US cities saw prices decline, no single city could compete with Vancouver which proved North America’s top performer, with prices rising 11.9% on an annual basis.
The Indian city of Chandigarh was at the bottom of the index with prices down by 7.7% year on year. Despite cutting interest rates four times in 2015, India’s base rate still stands at 6.75 and the economy has faltered impacting on household income.
Of the 43 cities which saw house prices decline in 2015 some 20 were located in Europe, with the southern European economies struggling in particular. Cities in Greece, Italy and Cyprus occupy four of the bottom five rankings.
The report also points out that urban and rural housing markets are increasingly polarised when it comes to price performance. ‘According to the World Bank, 54% of the world’s population currently lives in cities, and by 2045 the urban population will rise by another two billion to six billion, suggesting the pressure on urban prices looks set to intensify,’ added Everett-Allen.
