Global house price growth has slowed, according to new figures, but slowdowns in some markets are hiding growth in Europe.
The Knight Frank Global House Price Index saw prices rise by just 0.3 per cent in the year to March 2015, its weakest annual growth for three years.
Weighted by a country’s GDP, the index ensures countries such as China and the US have a greater influence than much smaller economies such as Jersey and Malta. 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 other countries are enjoying growth.
Indeed, around 75 per cent of countries tracked by the index recorded flat or positive annual price growth in Q1 2015, a significant turnaround from 47.2 per cent three years ago.
This turnaround is even more apparent in Europe, which previously dominated the bottom half of Knight Frank’s rankings. Now, seven of the top 10 countries are located in Europe.
“A two-speed Europe is increasingly evident,” says Knight Frank’s Kate Everett-Allen. While Cyprus, Greece, France and Italy sit among the 10 weakest-performing markets, Portugal and Spain have both seen prices rise in the past three months.
Despite slowdown in Japan and China, Hong Kong led annual growth, with prices up 18.7 per cent year-on-year. Hot on its heels, though, was Turkey, which, like Ireland, Luxemburg and Estonia, recorded double-digit annual growth: prices rose 18.6 per cent year-on-year in Q1 2015.
Development is following suit, with growth in the construction sector reaching 2.9 per cent for the first nine months of 2014.
Adil Yaman, Director of Universal21, the leading property agency in South-West Istanbul, comments: “Turkey’s construction sector is flourishing, increasing their total turnover by 4.6 per cent in 2014, and Istanbul’s property market is at the forefront of this demand for new build projects. Proud to be central to Istanbul’s expanding real estate industry, we have definitely noticed an increase in enquires regarding new build properties.”