Property price growth is moderating around the world, latest global index shows
Property prices around the world are rising but overall the rate of growth continues to moderate, with values up 4.3% in the 12 months to the end of 2018, the latest global index shows.
This was the lowest annual rate of growth recorded by Knight Frank’s global house price index since the third quarter of 2016.
The highest growth was 15.1% in Slovenia while the long term frontrunner, Hong Kong, slipped from first to 22nd place as average prices fell by 6.2% in the final three months of 2018.
In second place was Malta with prices up by 11.8%, then the Chinese mainland up 10.7%, Hungary up 10.4%, Mexico up 9.9%, Turkey up 9.7%, the Czech Republic up 8.7% and Latvia up 8.6%.
Only eight of the 56 markets tracked saw prices decline in 2018 and half of them were in Europe. The biggest fall was 2.9% in Finland, followed by a fall of 2.1% in Israel, while prices fell by 1.9% in Australia, by 1.6% in Sweden and by 0.8% in Italy and Morocco.
‘With 2019 expected to see greater economic uncertainty, heightened market regulation and a rising cost of debt in major economies we expect the rate of price growth globally to moderate further next quarter,’ said Kate Everett-Allen, head of international residential research at Knight Frank.
She pointed out that rising prices were evident in Central and Eastern Europe (CEE) in the previous index report. When it comes to Slovenia, the International Monetary Fund estimates the country’s economy expanded by 4.5% in 2018 and as a member of the Eurozone, interest rates remain low, aiding housing market performance.
The latest data from the Slovenian Statistical Office shows sales volumes have almost doubled from 5,700 in 2009 to over 10,000 in the year to the third quarter of 2018. She also explained that Hong Kong’s slide was an expected consequence of: a further tightening of housing policy in June 2018, a volatile stock market, a strengthening currency, and, the global trade dispute weighing heavily on buyer sentiment.
The index shows that despite significant disparities across the Chinese Mainland, the outperformance of some cities such as Xi’an helped lift annual growth from 8.9% last quarter to 10.7% at the end of 2018.
‘Put in context though, some cities were registering annual growth of 30% to 40% two years ago and although prices are still rising overall, sales across China are expected to decline in 2019 and the loosening of property regulations will be a slower process than expected,’ said Everett-Allen.
Europe’s 2018 figures present a mixed picture, Central and Eastern European countries are out in front, Portugal with growth of 6.1% is now outpacing Germany at 5.4% and the UK at 2.5% is only marginally ahead of Greece at 2.4%.
Boosted by annual price growth of 9.9% in Mexico, 8.1% in Colombia and 6.9% in Chile, Latin America was the strongest performing world region in 2018. Africa at 1.6% was the weakest.
‘With 2019 expected to see greater economic uncertainty, heightened market regulation and a rising cost of debt in major economies we expect the rate of price growth globally to moderate further next quarter,’ Everett-Allen concluded.