Global residential prices see nearly flat growth in Q3
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Prices for prime residential property in the world's leading city markets rose by only 0.2 per cent in the three months to September and by 4 per cent over a 12-month period, according to Knight Frank Residential Research.
This moderate level of price growth is partly attributable to the fact that the third quarter, for much of the world’s population, is dominated by the summer holiday season, which often sees slower sales activity, reducing pressure on prices, the research house said yesterday.
Key events on the political and economic stage are also likely to have been contributory factors – the prospect of tightening monetary policy in the United States, the approaching general election in Britain, including discussions of a mansion tax, the persistence of cooling measures in key Asian cities and, perhaps most pivotal, a new set of negative economic indicators emanating from Europe.
Despite the prime index’s muted performance, luxury homes continued to outperform their mainstream counterparts. The average price of a luxury home on the index is 36 per cent higher than it was at the index’s lowest point in the second quarter of 2009, while the average price of a mainstream property has risen by 14 per cent over the period.
Although Jakarta tops the rankings, with prices rising 27 per cent in the year to June, the latest data, the city has seen a sharp deceleration in prices with prices rising by only 2.5 per cent in the first half of the year. In Dubai, luxury price growth has slowed, partly because of temporary factors such as Ramadan, which led to weaker buyer activity, but also because of the United Arab Emirates central bank’s mortgage cap, which is stricter for those purchasing properties above 5 million dirham (Bt44.7 million).
Analysing the data on a quarterly basis, Tokyo and Cape Town were the strongest performers with prices ending the three-month period 9.2 per cent and 6.3 per cent higher.
In the US, all four cities included in the index are positioned in the top 10 rankings for annual price growth.
The disparity with Europe’s cities is stark. Luxury prices rose by 10.5 per cent on average across North American cities over a 12-month period compared with an average of only 1 per cent across European cities.
This quarter marks the inclusion of Seoul for the first time. Prices in the South Korean capital are continuing their recovery since reaching their low last year.
