Iceland leads the GLOBAL HOUSE PRICE INDEX ranking for the first time, with a growth of 14.7 percent per annum and out of the 55 analysed countries, 40 had a growing direction as well. Romania jumped from 31st place in 2015 to 15th in 2016.
Despite the landscape of political and economic uncertainty, 2016 was still a year where residential markets grew, but we also experienced significant ranking changes in the performance of mainstream residential markets around the world, according to a new report by real estate consultancy Knight Frank.
The top of the rankings table looks significantly different from a year ago. Long-term frontrunners Turkey and Sweden have slipped down the rankings from 1st and 3rd position in 2015 to 5th and 20th respectively in 2016. A weakening lira, a rate rise to 8 percent and recent security concerns have dented household confidence in Turkey. Sweden, for its part, saw annual price growth halve from 12.3 percent in 2015 to 6.1 percent in 2016.
The Romanian residential market evolution can be seen also from this last ranking, where we notice that the country has doubled its growth in 2016, compared to 2015 (7.8 percent vs 3.6 percent) and we expect the continuation of this trend.
China jumped from 43rd position in the rankings in 2015 to 7th in 2016 with average prices now increasing by 10.8 percent per annum according to the country’s National Bureau of Statistics. Despite strong price inflation in 2016 the trend is far from uniform and many of the cities experiencing the strongest increases have now seen new lending restrictions introduced.
Whilst the top 10 has shifted radically in the last year, the bottom of the rankings table looks broadly familiar. Ukraine, Taiwan, Singapore and Cyprus continue to be characterised by weak growth either due to ongoing geopolitical crises, economic fragility or cooling measures which are artificially restraining growth.
The overall picture is one of stable or rising prices, despite the global landscape of political and economic uncertainty. The number of housing markets recording price rises has increased from (43 in 2015 to 47 in 2016). With higher inflation and diverging monetary policies expected in 2017, we may see a widening gap between the strongest and weakest performing market.
