European performance weighs on global housing markets
05 December 2012
Q3 2012 results show that Europe was the only region to see prices decline. But Brazil, Hong Kong, Turkey, Russia, Colombia and Austria experienced double digit growth.
- The Knight Frank Global House Price Index rose by 0.1% in the threemonths to September 2012 and by 1%over a 12 month period
- European countries occupy the bottom twelve rankings in terms ofannual price growth
- Greece is positioned at the bottom of the rankings, with a 11.7% decline inprices in the year to September
- Brazil recorded the highest annual increase in prices (up 15.2%) but thepace of growth is slowing
- Price growth in Asia Pacific is also slowing, with 4.2% annual growth inthe year to September, compared to7.6% in the previous 12 months
Mainstream global property prices stand just 5.2% above the lows experienced in the wake of the financial crisis in Q2 2009.
Knight Frank’s Prime Global Cities Index, which tracks the value of luxury property in 26 cities across the world, shows that prime property values have climbed by 18.7% over the same period.
With the Eurozone now in its second recession in three years, buyers’ confidence is at an all-time low - all the bottom 12 rankings are occupied by European countries this quarter.
The Eurozone’s 17 member states have on average seen prices fall by 1.8% in the 12 months to September. Other world regions such as South America and Asia Pacific have seen growth of 9.8% and 4.2% respectively.
Greece has now pushed Ireland off the bottom slot – where it has resided for five consecutive quarters – by recording an average price fall of 11.7% in the last year. Ireland, by comparison, has seen its rate of decline improve, up from -14.3% a year ago to -9.6%.
Despite positive data from the US – prices are 3.6% higher than in the third quarter of 2011, vacancy rates are at their lowest level since 2005 and housing starts are up 49% year-on-year - the US fiscal cliff casts significant doubt on this recovery.
Asia’s policymakers are offering little hope of an Asian-driven recovery. China’s new leadership looks set to continue with stringent property cooling measures and new lending restrictions in Hong Kong are likely to limit the availability of credit.
Six markets recorded double-digit annual price growth in the year to September; Brazil, Hong Kong, Turkey, Russia, Colombia and Austria.
Kate Everett-Allen, International Residential Researcher at Knight Frank, said: “Confidence, affordability and debt are constraining Europe. Strict lending and the looming fiscal cliff may dent the early signs of growth in the US while regulatory measures in Asia are keeping housing markets in check. The current period of stagnation looks set to continue well into 2013.”
Knight Frank, on behalf of Northridge Capital, launches to the market 33 Blackfriars Lane in the City of London, EC4V 6EH. Offering 16 beautifully-refurbished two and three bedroom apartments arranged over 5 floors, 33 Blackfriars Lane is set in an ideal location within Blackfriars providing a range of transport links including access to Crossrail from 2018, making this a great investment.
Blackfriars is located a short distance from both the financial hub of London and the River Thames, surrounded by a range of iconic architecture both new and old, including St Paul’s Cathedral and Millennium Bridge. Blackfriars allows you to live in the centre of London where there is very little residential development.
Prices of 33 Blackfriars Lane start at £835,000. Apartments range from 639 sq ft to 1,527 sq ft in size. Anticipated completion on 31 October 2014. There is expected to be significant interest in buying from both those who know and love the area, and purchasers who are new to London.
Neil Batty of International Project Marketing at Knight Frank, says, “Refurbished developments within the City of London are extremely rare and therefore we expect 33 Blackfriars Lane to receive significant interest from all international markets.”