Vancouver bucks the trend as prime property prices moderate

Prices for prime properties in 35 cities across the world increased by 3.6 per cent in the year to the end of March, according to Knight Frank’s Prime Global Cities Index for the first quarter of 2016.

penthouse Vancouver Canada
The report said that price increases had shown recent signs of moderating, although Vancouver stood out as bucking the trend with an index-leading 26 per cent increase over the year.Strong price growth in Sydney and Melbourne, the report said, resulted in Australasia being the strongest performing region, while Hong Kong and Taipei slipped to bottom of the rankings after prices fell by 6.4 per cent and 7.6 per cent respectively over the year.The report said that a "severe" shortage of suitable properties was behind the sharp increases in Vancouver prices, which the recent increase in land transfer tax had not dented."Along with Vancouver, three other cities – Shanghai, Sydney and Melbourne –also recorded double-digit annual price growth, but the gap between this top tier and the remaining cities has widened," added the report."Record-low interest rates and cheap finance fuelled demand in Shanghai leading to price growth of 20 per cent year-on-year. However, in March the government tightened mortgage lending rules which is likely to result in slower growth in thesecond quarter."Australasia proved the world’s hottest world region in the year to March 2016 with prices rising 12 per cent on average; this is despite the introduction of a new fee for foreign buyers."Knight Frank said that, after a period of exceptional growth, prime prices in central London had increased by only 0.8 per cent over the year, its lowest increase since a 3.2 per cent decrease in 2009 at the height of the global financial crisis.Although prices in Paris dipped three per cent in annual terms, the report said "prices stabilised over the last quarter as French buyers, having recognised value in their capital’s market, increased their market share".It added, "New regulation in the form of measures to improve transparency, new taxes or fees for foreign buyers are increasing in number. However, the impact on the market of such measures is largely dependent on market fundamentals and where each market is in relation to its property market cycle."Kate Everett-Allen, a partner in residential research at Knight Frank, commented, “Since 2014 the index has consistently recorded annual growth of 3–4 per cent with no city recording double digit annual price declines since Q2 2015."

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