European property prices up for first time since 2010, says global index
Overall European house prices have increased for the first time since 2010 part there is sharp divergence in performance between countries, accroding to the latest global index from Knight Frank.
Prices in Europe were up 0.7% over the last 12 months. Turkey was the strongest, up by 12.2% and Greece the weakest, down by 11.5% year on year. The Netherlands and Hungary also experienced a poor time with price falls of 8.2% and 8.5% on an annual basis.
The UK, after three years of negative or stuttering price growth in its mainstream market, has found some traction. Prices rose by 2.6% in the second quarter.
Mainstream prices in Greece, Spain and Italy are now 31%, 29% and 15% below their respective market peaks, according to official data and for the fourth consecutive quarter the bottom 10 rankings have all been occupied by European countries.
Tight lending conditions, high levels of consumer debt and rising unemployment are depressing market activity in the European markets, according to the analysis from Knight Frank.
Overall prices rose in 37 of the 55 countries tracked and overall house prices around the world rose by 2.4%, the highest rate of annual growth since the second quarter of 2010.
Dubai leads the annual rankings, recording price growth of 21.7% in the year to the end of June. The index says that emirate’s housing market has gained momentum since late 2012, while its prime market led the way, mainstream prices are now following suit.
However, the index, which tracks the performance of mainstream house prices around the world, shows that Europe is the weakest performing world region. The medium term outlook is muted, and the report says that Europe has been the main drag on the global housing market’s performance in recent years.
But it also points out that growing confidence is being tempered by deterioration in the outlook for a number of the large emerging market economies. ‘The economies of some key emerging markets are showing signs of strain and this is being reflected in their housing markets performance,’ the report explains. For example, annual price growth in Brazil stands at 11.9%, down from 18.4% a year earlier.
But the US housing market recovery appears to be on firmer ground, with its second consecutive quarterly rise. Nationally, prices rose by 10.2% in the last 12 months, with the cities of Atlanta and Chicago recording the strongest growth in the second quarter.
‘It is interesting to note that the world’s two largest housing markets, the US and China, are experiencing contrasting fortunes with quarterly growth reaching 7.1% in the US but hovering around 0% in China,’ the report points out.