Global house prices grow at record rate
03-19-2014
News BY: Daniel Flynn
Global house prices saw their biggest one-year gain last year, in almost two decades, according to Knight Frank.
The 8.4% rise in Knight Frank's Global House Price Index was, in fact, the largest since the international real estate company began tracking global house prices in 1995, the company said in a briefing paper that summarised the index's findings.
The year before prices rose 4.6%, Knight Frank said.
Knight Frank attributed the rise to an upturn in the global economy.
Thirty-nine countries saw house prices rise in 2013, an increase from 27 in 2012, the Knight Frank data shows.
Dubai tops the 2013 index, with a 35% increase in the price of residential housing. According to Knight Frank, the emirate still ended the year with average house prices still 25% below their 2008 peak.
China and Taiwan rank second and third respectively, with prices climbing 28% and 15%.
Prices in Hong Kong, the United Kingdom and Ireland also rebounded significantly, with each of these countries seeing house prices grow by more than 6% during 2013.
This was seen as particularly significant for Ireland, which occupied the index’s bottom position – or 56th place – no fewer than seven times between 2009 and 2011, the Knight Frank researchers noted. The country is now at 19th place in the index.
House prices in Singapore responded in 2013 to the government's continuing efforts to cool the market, with prices rising just 1.9%, dropping the city-state to 32nd place in the index. Last year it was in 24th place.
Political tensions at the bottom
Countries that have endured recent political tensions and economic stagnation tend to occupy the bottom rungs of the Knight Frank house price ladder, with Ukraine, currently the target of Russian expansionist intentions, in 56th place, having posted a 26% decline in prices last year.
Greece and Cyprus also saw their housing markets weaken, with declines of 9.3% and 7.3% respectively.
While European countries such as France, Jersey, Spain and Italy dominated the lower end of the index, Knight Frank said the rate of decline in these markets was slowing. The company's researchers said that improving employment prospects and the continuation of low interest rates had helped to fuel buyer confidence.
House prices in a number of emerging markets grew strongly, with Turkey, Brazil, Indonesia, and Colombia all appearing in the top ten last year, based on their gains. Each of these countries recorded double digit growth in house prices in 2013 in spite of what was, for most, an economically turbulent year.
The Knight Frank Global House Price Index was established in 2006. It is compiled on a quarterly basis, using official government statistics or central bank data where available. The index is now weighted according to each country’s GDP, meaning house price movement in the US and China, for example, will have a greater bearing on the index’s performance than that recorded in such markets as Malta and Jersey.
Knight Frank Global House Price Index 2013 – Top 15
| Country | Rank 2013 | Rank 2012 | % change |
| Dubai | 1 | 2 | +34.8% |
| China | 2 | 8 | +27.5% |
| Taiwan | 3 | 7 | +15.1% |
| Estonia | 4 | 17 | +14.5% |
| Turkey | 5 | 4 | +13.8% |
| Brazil | 6 | 3 | +12.7% |
| Indonesia | 7 | 14 | +11.5% |
| Colombia | 8 | 10 | +11.5% |
| United States | 9 | 12 | +11.3% |
| Poland | 10 | 41 | +10.2% |
| Malaysia | 11 | 13 | +10.1% |
| Kazakhstan | 12 | N/A | +9.4% |
| Australia | 13 | 28 | +9.3% |
| New Zealand | 14 | 15 | +9.2% |
| Iceland | 15 | 18 | +8.7% |
Knight Frank Global House Price Index 2013 – Bottom 10
| Country | Rank 2013 | Rank 2012 | % change |
| Slovakia | 47 | 31 | -2.6% |
| Jersey | 48 | 32 | -2.7% |
| The Netherlands | 49 | 51 | -3.7% |
| Spain | 50 | 54 | -4% |
| Italy | 51 | 45 | -5.3% |
| Cyprus | 52 | 50 | -7.3% |
| Hungary | 53 | 49 | -7.6% |
| Greece | 54 | 55 | -9.3% |
| Croatia | 55 | 53 | -14.4% |
| Ukraine | 56 | 37 | -25.9% |