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News from Knight Frank Hong Kong

Knight Frank Global Residential Cities Index Q4 2016

20 April 2017

 Knight Frank today launches the Global Residential Cities Index for Q4 2016 which tracks the performance of mainstream house prices across 150 cities worldwide, 47 of which are from the Asia-Pacific region. 

 
Results for Q4 2016:
 
  • House prices increased by an average 6.6% in 2016, its highest rate in three years. However, excluding Chinese cities, the index would have increased by only 4.9% in 2016.
  • Chinese cities occupy the index’s top nine rankings for annual house price growth. Nanjing leads the rankings with average prices ending last year 41.1% higher. Chinese cities would have occupied the entire top ten had New Zealand’s Wellington (23.7%) not nudged Shenzhen (23.5%) out of tenth spot.
  • The cities of Auckland (12.4%) and Vancouver (17.0%) which have for several years been New Zealand and Canada’s stellar performers have now been usurped by their respective rivals, Wellington and Toronto (19.8%).
Nicholas Holt, Head of Research for Asia-Pacific at Knight Frank, says, “The dominance of major Chinese cities at the top of the 12-month price growth rankings has led to increased moves by policy makers to cool these markets off with tougher home purchase restrictions and tighter lending criteria. These measures, coupled with more stringently imposed capital controls, could push more capital into some of the smaller Chinese cities, some of which are suffering from significant supply overhangs.” 
 
David Ji, Director, Head of Research & Consultancy, Greater China, says “Hong Kong’s home prices rose 4.2% last year, although the government has implemented various cooling measures. The government’s announcement in April of a 15% stamp duty levy on first-time homebuyers purchasing multiple flats in one go is not expected to drag down home prices, as these transactions make up less than 5% of total sales. High land prices and strong housing demand will lend support to home prices, which are expected to rise a mild 5% in 2017.”