European property prices rise for the first time since 2010
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House prices around the world rose by 2.4 per cent last quarter - the highest rate of annual growth since the second quarter of 2010, according to Knight Frank.
Prices rose in 37 of the 55 countries tracked by the real-estate consultancy’s Global House Price Index, compared with 27 two years earlier, which points to an improving global picture.
Dubai leads the annual rankings, recording price growth of 21.7 per cent in the first six months. The emirate’s housing market has gained momentum since late last year. While its prime market led the way, mainstream prices are now following suit.
For the first time since 2010, European countries recorded annual price growth. However, the average 0.7-per-cent uplift over the past 12 months masks a sharp divergence in performance, with Turkey the strongest performer, up by 12.2 per cent, and Greece the weakest, down by 11.5 per cent year on year.
Mainstream prices in Greece, Spain and Italy are now 31, 29 and 15 per cent below their market peaks, according to official data.
The economies of some key emerging markets are showing signs of strain, and this is being reflected in their housing markets’ performance. Annual price growth in Brazil, for example, stands at 11.9 per cent, down from 18.4 per cent a year earlier.
The US housing market’s recovery appears to be on firmer ground, with its second straight quarterly rise. Nationally, prices rose by 10.2 per cent in the last 12 months, with the cities of Atlanta and Chicago recording the strongest growth last quarter.
The world’s two largest housing markets – the United States and China – are experiencing contrasting fortunes. Quarterly growth reached 7.1 per cent in the US but hovered around zero in China.
For the fourth quarter in a row, the bottom 10 rankings have all been occupied by European countries. While Greece, Spain and Portugal dominate the headlines, the sluggish markets of the Netherlands, Hungary and Croatia are often overlooked. These countries recorded price falls of 8.5 per cent, 8.2 per cent and 5.5 per cent in the year to June.
Tight lending conditions, high levels of consumer debt and rising unemployment are depressing market activity. The United Kingdom, after three years of falling prices or stuttering price growth in its mainstream market, has found some traction. Prices rose by 2.6 per cent last quarter.
The medium-term outlook is muted. Europe has been the main drag on the global housing market’s performance in recent years but growing confidence is being tempered by deterioration in the outlook for some of the large emerging-market economies.
