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News from Knight Frank Hong Kong

Knight Frank launches Global House Price Index Q1 2017

16 June 2017

Knight Frank, the independent global property consultancy, today launches the Global House Price Index for Q1 2017. The index monitors and compares the performance of mainstream residential markets in 55 countries across the world, 11 of which are from Asia-Pacific. The index increased by 6.5% YoY in Q1 this year, its highest rate of growth in the last three years. This is up from the 6.0% YoY growth in the previous quarter.

 
Results for Q1 2017:
 
  • Eleven countries recorded double-digit price growth in the year to March 2017; a year earlier, only four fell into this bracket.
  • Price growth in China has slipped marginally from 10.8% to 10.3% YoY with more than 45 cities now under home purchase restrictions.
  • Iceland leads the rankings for the second consecutive quarter, recording average price growth of 17.8% in the year to March 2017. Here, a lack of supply is fuelling price growth.
  • Ahead of their 2017 elections, France and the Netherlands saw price growth increase; South Korea, the UK and Germany are seeing price growth slow.
 
Nicholas Holt, Head of Research for Asia-Pacific, says, “Three of the top 10 strongest growing markets globally were in Asia-Pacific at the end of the first quarter of 2017. For example, Hong Kong, in second place, continues to attract buyers amid cooling measures, while New Zealand in third place has also seen the central bank act to curb excessive lending. 
 
David Ji, Director and Head of Research & Consultancy, Greater China, says, “Hong Kong, ranked second on our GHPI list, saw demand from both investors and end-users growing strong despite the raised stamp duty rates and stricter financing requirements. Recent news of record breaking land sales also add to the bullish sentiment. Based on this we expect that prices will continue to grow this year, albeit less strongly, given the prospects of interest rate hikes and underlying cooling measures. We expect Hong Kong’s mass residential prices will increase between 5-10% in 2017.”
 
Meanwhile March saw Mainland (GHPI ranking 10th) home prices still growing, more so in second and third tier cities than first tier cities, given home purchase restrictions (HPR) are stricter in the latter. In contrast, for many second and third tier cities their key objective is still to clear the huge housing inventory. Now there are more than 45 cities implementing HPR. Nevertheless, with prices growing across the country we shall see more cities joining the rank. Therefore, this year we forecast prices in first tier cities to grow 3-5% while major second tier to grow 2-4%.”