House prices across 150 key cities around the world increased by 5.5% on average in the year to June 2016, the strongest annual rate of growth for two years.
Of the 150 cities tracked by the Knight Frank global residential cities index some 114 recorded positive annual price growth in the year to June and, of these, 31 cities saw price growth exceed double digits.
Chinese cities occupy six of the top 10 rankings for annual price growth with Shenzhen leading the growth although year on year price growth has slowed from 63% to 47% in the last three months.
The ascension of Chinese cities has been rapid. According to data from China’s National Bureau of Statistics the average annual rate of growth for the top 10 performing Chinese cities equates to 22% in the year to June, a year earlier the comparable figure was -1.1% for the same cities.
The report points out that a number of the municipal governments in China are introducing a new raft of stringent cooling measures at a local level to dampen sales, these range from limiting non-locals to single home purchases and tightening rules for local residents in relation to second home purchases.
In Europe, Budapest leads the rankings with prices rising 24% on an annual basis but cities in the UK, the Netherlands and Scandinavia are also well represented. Four of the continent’s top 10 performing cities, Bristol, London Nottingham and Birmingham are all in the UK with price growth of 15.3%, 14.4%, 10.7% and 9.6% respectively.
Moscow occupies the bottom ranking with prices falling 11% in the year to June, followed by
Jaipur with prices down 10%. The report says that in both cases sluggish economies are having a direct impact on housing demand.
Hong Kong has seen prices fall by 8.1%, Aberdeen in the UK by 6.2%, and Perth in Australia by 4.8%. Cities slipping in the rankings over the last quarter include Istanbul from third to ninth, Stockholm from sixth to 29th and Auckland form eighth to 15th.
Kate Everett-Allen, head of international residential research pointed out that the index tracks the period until the end of June 2016 so it does not yet reveal the effect of key political and economic events such as the UK’s decision to leave the European Union, Vancouver’s new tax for foreign buyers and the extent to which China’s cooling measures are taking biting.
