Global house prices in 2015 build on 2014 gain

Global house prices in 2015 build on 2014 gain

KNIGHT Frank's Global House Price Index rose 3 per cent in 2015 - a stronger gain compared with a 2.3 per cent increase in 2014.

This year, however, the outlook is muted. Kate Everett-Allen, partner, international residential research at the property consulting group, said: "We expect the index's overall rate of growth to be weaker in 2016 than in 2015. The global economy is experiencing a potentially dangerous cocktail of low oil prices, a strong dollar and a continued slowdown in China."

As for 2015, "concerns over the global economy failed to dent buyer confidence", Knight Frank said in its report. "Instead, the lingering low interest rate environment influenced sentiment."

The index tracks mainstream residential markets in 55 countries across the world. Of these, prices in 43 (78 per cent) rose in the fourth quarter of 2015, up from 10 (19 per cent) in Q2 2009 in the aftermath of Lehman's collapse.

Turkey leads the ranking with prices escalating 18 per cent last year. "Increasingly viewed as a safe haven for Middle Eastern investors, Turkey is bridging East and West while also seeing strong population growth," the report said.

Ukraine and Greece were the weakest housing markets in 2015, recording price falls of 12 per cent and 5 per cent respectively.

Last year, mainstream Asian residential markets recorded only 1.9 per cent average annual price growth, lower than the global average of 3 per cent.

Nicholas Holt, Knight Frank's head of research for the Asia-Pacific, said: "While a number of markets experienced positive growth, Taiwan and Singapore, which have seen negative growth for a number of quarters, were joined by Hong Kong in the fourth quarter of 2015, which saw residential prices decline by 3.7 per cent over the preceding quarter.

"While long-term growth prospects remain positive, the continued economic uncertainty in the region is likely to weigh on housing market sentiment in the near term."

Nevertheless, Australasia - comprising Asia, Australia and New Zealand - was the strongest performing geographical region last year with a 12.4 per cent increase in home prices.

The figure was buoyed by the strong showing of New Zealand and Australia, with growth of 14.2 per cent and 10.7 per cent respectively.

Knight Frank's Global House Price Index is compiled on a quarterly basis using official government statistics or central bank data where available.

Singapore remained one of the weakest performers among the various countries. It was ranked 51st - fifth from the bottom, after posting a 3.6 per cent full-year drop in non-landed private home prices.

Nevertheless, the rate of quarterly price decline in the Urban Redevelopment Authority's non-landed private home price index has moderated to 0.2 per cent in Q4 2015 after nine consecutive quarters of decline, noted Knight Frank's Singapore research head. Alice Tan.

"This offers some tentative signs of price stabilisation towards end-2015. However, with Singapore's anaemic economic growth and jobs outlook turning south for the past few months, there has been weakening buying sentiment in both the new sale and resale private homes markets especially for mass-market private homes. Prices of Singapore non-landed private homes are likely to trend lower by -0.2 per cent to -0.5 per cent quarter on quarter in Q1 2016."

This article was first published on March 22, 2016.
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