House-price growth: A two-speed Europe?

Ranked by annual house-price growth, seven of the top ten countries around the world are in Europe, a new report has found. However, another four European countries are among the weakest-performing markets globally.

According to the latest edition of estate agent Knight Frank's Global House Price Index, prices internationally saw their weakest annual growth for three years during the first quarter of 2015, increasing by just 0.3 per cent on average in the year to the end of March. However, this figure hides a significant disparity between world regions.Weighted by country GDP, the index ensures that huge economies like China and the US have a greater influence than small ones such as Jersey and Malta.Kate Everett-Allen, of Knight Frank International Residential Research, said, "With some of the larger economies, such as Japan, France and, crucially, China all experiencing housing-market slowdowns, this is masking the fact that, overall, we are seeing more sustainable growth amongst a larger number of countries."Around 75 per cent of countries tracked by the index recorded flat or positive annual price growth in Q1 2015. Three years earlier, the figure was closer to 47.2 per cent."Hong Kong leads the annual rankings this quarter, with mainstream prices ending the year nearly 19 per cent higher. A lack of supply, along with the popularity of smaller apartments due to affordability constraints, is behind the acceleration in mainstream prices."Russia and the CIS [former Soviet republics] represent the index's weakest-performing world region, with prices down 2.3 per cent year on year, Ukraine's fall of 15.5 per cent in annual terms having a significant bearing."For several years past, European countries have been in the bottom half of the rankings. This edition of the index sees them more evenly spread, with seven of the top ten countries located in Europe. Turkey (up 19 per cent), Ireland (up 17 per cent), Luxembourg (up 12 per cent), Estonia (up 11 per cent) and Iceland (up 9 per cent) rank highest.However, a two-speed Europe is increasingly evident, says Kate Everett-Allen. "Cyprus, Greece, France and Italy sit amongst the ten weakest-performing markets. Notable by their absence, however, are Spain and Portugal."Prices in Spain are now rising at their fastest rate in six years, in part due to improved mortgage lending. The two bellwethers of global housing economics, China and the US, are pursuing divergent courses, but for how long?"While prices continue to soften in China (down 6.4 per cent on average year on year), the volume of sales rose by 7 per cent year on year in April, on the back of looser monetary policy."The US, on the other hand, recorded 4.1per cent growth in the year to March, but, with underlying inflation still rising, a rate rise is expected later this year."According to the latest edition of estate agent Knight Frank's Global House Price Index, prices internationally saw their weakest annual growth for three years during the first quarter of 2015, increasing by just 0.3 per cent on average in the year to the end of March. However, this figure hides a significant disparity between world regions.Weighted by country GDP, the index ensures that huge economies like China and the US have a greater influence than small ones such as Jersey and Malta.Kate Everett-Allen, of Knight Frank International Residential Research, said, "With some of the larger economies, such as Japan, France and, crucially, China all experiencing housing-market slowdowns, this is masking the fact that, overall, we are seeing more sustainable growth amongst a larger number of countries."Around 75 per cent of countries tracked by the index recorded flat or positive annual price growth in Q1 2015. Three years earlier, the figure was closer to 47.2 per cent."Hong Kong leads the annual rankings this quarter, with mainstream prices ending the year nearly 19 per cent higher. A lack of supply, along with the popularity of smaller apartments due to affordability constraints, is behind the acceleration in mainstream prices."Russia and the CIS [former Soviet republics] represent the index's weakest-performing world region, with prices down 2.3 per cent year on year, Ukraine's fall of 15.5 per cent in annual terms having a significant bearing."For several years past, European countries have been in the bottom half of the rankings. This edition of the index sees them more evenly spread, with seven of the top ten countries located in Europe. Turkey (up 19 per cent), Ireland (up 17 per cent), Luxembourg (up 12 per cent), Estonia (up 11 per cent) and Iceland (up 9 per cent) rank highest.However, a two-speed Europe is increasingly evident, says Kate Everett-Allen. "Cyprus, Greece, France and Italy sit amongst the ten weakest-performing markets. Notable by their absence, however, are Spain and Portugal."Prices in Spain are now rising at their fastest rate in six years, in part due to improved mortgage lending. The two bellwethers of global housing economics, China and the US, are pursuing divergent courses, but for how long?"While prices continue to soften in China (down 6.4 per cent on average year on year), the volume of sales rose by 7 per cent year on year in April, on the back of looser monetary policy."The US, on the other hand, recorded 4.1per cent growth in the year to March, but, with underlying inflation still rising, a rate rise is expected later this year."For more Re:locate news and features about residential property, click here

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