The political and economic climate remains uncertain in many parts of the world and this is reflected in global property prices whose quarterly growth took a slow but sure track in the first quarter of this year. Top performers were concentrated in the north while key Asian markets continue to flounder. This BRIC Group news piece provides the full picture.
The latest Knight Frank Global House Price Index for Q1 this year reveals an uneven picture across the world and changes in previous trends. Overall, the Index experienced an increase of 3.4 per cent, slightly above the previous quarter and confirming the slow but steady climb in global property prices.
Key takeaways in the global scenario
For Knight Frank, the latest report includes several key takeaways. These include a slowdown in property prices in Turkey, a country that continues to stand at the top of the Index but whose quarterly growth has suffered a significant decrease. And the “treading water” situation in the UK and the US whose discreet performances in the ranking for global property prices reflect the current political uncertainty in the two (the EU referendum in the UK and the presidential elections in the US).
Another point of interest were the negative figures registered in several Asian markets, namely Singapore, Hong Kong and Taiwan, top rankers in the index not so long ago. Knight Frank attributes this to the area’s slow economic growth and the introduction of regulatory measures that have cooled the appetite for property in the region.
And finally the fact that 12 out of the bottom 20 positions are occupied by European countries, 9 of them Eurozone members was highlighted in the report. These countries include traditional property hotspots such as France and Spain.
Top performers in world property markets
The quarterly rankings for increases in global property prices are dominated by northern European countries. At the top sits Lithuania whose 8.9 per cent hike in prices is 2.5 points clear of the next on the table, Poland where property went up by 6.4 per cent between January and March this year.
Third and fourth positions go to Norway and Russia with 3.8 per cent and 3.6 per cent price rises respectively. The case of Russia is particularly significant since it is gradually rising up the table after several quarters of negative growth.
In annual terms, Turkey continues to take top place for year-on-year growth with a massive 15.3 per cent hike in property prices. Sweden lies in second position with an impressive 12.9 per cent increase and its near neighbour Lithuania registered 10.5 per cent. New Zealand, whose market is cooling after big price increases last year and Malta complete the top five.
Bottom performers across the globe
At the opposite end of the table, global property prices show a reverse tendency and several countries feature both as the worst performers in both the quarterly and annual rankings.
The country that saw the biggest price drops in the first three months of this year was Hong Kong where property went down by 6.4 per cent. This decrease is well over double the second worst performer, the Ukraine whose property market suffered a 2.8 per cent contraction. Completing the table of the bottom five are Taiwan with a drop of 2.3 per cent and Slovenia and Morocco, both experiencing a decrease of 1.2 per cent.
In the year to the end of March, the property market in the Ukraine was the worst performer with a total devaluation in property prices of 10.5 per cent. Taiwan, Hong Kong and Singapore, once home to some of the highest global property price increases, saw year-on-year drops of 6, 5 and 3.1 per cent respectively.
“These global property prices show a mixed bag of results and clearly illustrate how the market in a country can fluctuate significantly from quarter to quarter,” said Dies Poppeliers, Managing Director of BRIC Group. “We believe that the best tactic for investment is to choose a specific location with consistently solid results to ensure a steady return for your money.”
(Source: Knight Frank)
An investment company specialising in global real estate opportunities, BRIC Group is currently developing The Coral resort, in Northeast Brazil, a luxury beachfront resort. BRIC Group also offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US.