The Worlds Best Performing Property Markets in 2016

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The Worlds Best Performing Property Markets in 2016

June 20, 2016

Knight Frank has come out with the new Global House Price Index or Q1 of 2016. Turkey has topped the index for the fourth successive quarter, although growth in Turkey has slowed down from 18% in the last quarter to 15% this year.

Australia and New Zealand, which are among the best performing markets in the world, saw a drop in prices this time, but nothing significant.  Global house prices have certainly risen across the world in 2016, but it does seem that the growth has been muted.

Events such as the Brexit referendum of June 23, fall in oil prices and political and economic issues have acted as a dampener on the overseas market. Emerging nations such as Russia, China and Brazil have been the worst affected. The growth of the property market in the US continues to remain steady despite the hotly contested Presidential election. 

 The index has shown that some of the important Asian markets are struggling. In Europe, there are many issues such as Brexit, the refugee crisis and the threat from extremist forces such as the ISIS which have kept the market from reaching high levels of growth.

Kate Everett-Allen, a researcher at Knight Frank says, “Twelve of the bottom 20 rankings are occupied by European countries and of these, nine are members of the Eurozone.”

She adds that the Scandinavian countries, especially Sweden, have acted as the few engines of growth in the overseas property market. Home prices in Sweden have risen by 12.8%. "Some Nordic countries, together with some Baltic states, stand out as rare hotspots," Ms. Everett-Allen added. 

Russia/CIS is now the worst performing region in the world. You can see the rankings of the top 10 global real estate markets in the Knight Frank Global House Price Index Q1 2016 here below.

 

Top 10 global real estate markets

Rank

Country

12-month change

Market direction

10

Ireland

7.4%

Up

9

Austria

7.6%

Up

8

Israel

7.9%

Up

7

Mexico

8.1%

Up

6

Australia

8.7%

Down

5

Malta

9.9%

Up

4

Lithuania

10.5%

Up

3

New Zealand

11%

Down

2

Sweden

12.9%

Up

1

Turkey

15.3%

Down

Source: Knight Frank Global House Price Index Q1 2016

 

As you can see, Australia is no longer among the top 5 property markets on the world after a poor performance in 2015-16. In Australia, national house prices have been up by 8.7%.

Michelle Ciesielski, the Knight Frank residential research Australia director said, “Overall growth in annual capital values has returned to more sustainable levels in 2016 – close to that experienced just over two years ago in the Australian mainstream housing market.”  

She adds that is “is possible we will see a further uptick in investor lending, and modest growth in capital values along the Australian east coast in the coming months.”  

 Australian cities of Sydney and Melbourne were ranked highly on the list of the world’s most unaffordable property markets. An average household in Australia is required to spend up to 12 times their annual income to buy a home in these cities.

Ms Ciesielski said “[It] is unlikely we will see price growth as strong as experienced at the peak of mid-2014 and late-2015.”.

 Among the countries that witnessed the biggest drop in prices were Greece, Taiwan and the Ukraine.

The United States recorded a stagnant growth of 0.9 percent in the first quarter of 2016, which the UK, where the property market is under pressure from the Brexit referendum, grew at 1.6 per cent.

Israel and Malta were among the smaller countries that have made their way into the list, taking up the 8th and 5th spots respectively.

These results will have an effect if you are trying to sell your overseas property this year and it depends on the country that you live in.