Scandinavia leads European city house price growth

Photo: Michael Caven

Scandinavia is emerging as a key centre of growth in Europe, as several cities enjoy double-digit house price growth.

Stockholm, Gothenburg, Malmo, Oslo and Copenhagen all recorded annual price growth of between 9 per cent and 17 per cent in the year to March 2016, according to Knight Frank.

The agency’s latest Global Residential Cities Index ranked Stockholm as the strongest growing region in the continent, with prices up 17.4 per cent, ahead of Budapest (15.5 per cent) and London (15.2 per cent). Gothenburg (14 per cent) and Bristol (14 per cent) completed the top five.

Low levels of new supply, high demand and cheap finance are fuelling price growth across the region.

The overall index, which tracks house prices across 150 cities worldwide using data from official sources, increased by 4.5 per cent over the 12 months.

74 per cent of the cities tracked by the index saw house prices rise in the year to March 2016. The gap between the strongest and weakest markets, though, expanded, which Knight Frank attributes to the “phenomenal” growth recorded in the Chinese city of Shenzhen.

“This rapidly-expanding technology hub, located within 11 miles of Hong Kong, saw annual price growth jump from 48 per cent last quarter to 63 per cent in the year to March 2016,” comments the agency.

Indeed, Chinese cities now account for four of the top five performing cities, although new measures introduced in March 2016 in some Tier 1 cities such as Shenzhen and Shanghai are “likely to lead to more muted growth during the remainder of 2016”.