Wealthy luxury homebuyers in China are continuing to skew prime property prices in the Asia Pacific, according to new research.
Although the Chinese government has taken the heat out of the country’s housing market with strict measures to curb investment and speculation, the city of Guangzhou topped the table of 100 cities with a massive 27.4% hike over the past 12 months.
Property in Guangzhou is cheaper than in Shanghai or Beijing, another factor driving the mage price rise, says the research by international property consultant Knight Frank.
While cooling measures in China have encouraged buyers to look overseas, Seoul, South Korea and Hong Kong have seen prices rise and the introduction of government action to cap prices.
Efforts to keep a lid on prices in Singapore are starting to show in annual growth – down from double digits to 6%. Pressures including higher wages, limits on supply of affordable homes and a thriving economy are keeping the market buoyant.
Oil price linked to prime home values
Prime markets in the Middle East, Russia and Africa are linked to the performance of oil prices. The cost of oil dipped early in 2017, rallying later, but not soon enough to boost local home values.
At the foot of the table, five cities saw prime markets fall by double-digits.
The worst was Lagos, Nigeria (-25%), followed by Doha, Qatar (-15%), Moscow (-11.3%), Umbria, Italy (-10.5%) and Abu Dhabi and Evian, Switzerland (Both -10%).
“Against the political odds 2017 was a year when the economic stars aligned and relatively healthy growth was seen across most markets, including, for the first time since 2008, a solid performance from European markets,” said the Knight Frank report.
“The outlook for 2018 is that economic growth will continue to support prices, but performance could be tempered as more central banks start to raise interest rates.”
Global cities with double-digit prime house price growth 2017
| Rank | City | Country | House price increase |
| 1 | Guangzhou | China | 27.4% |
| 2 | Cape Town | South Africa | 19.9% |
| 3 | Aspen | USA | 19.0% |
| 4 | Amsterdam | Netherlands | 15.0% |
| 5 | Seoul | South Korea | 13.2% |
| 6 | Frankfurt | Germany | 12.9% |
| 7 | Seattle | USA | 12.2% |
| 8 | Paris | France | 12.0% |
| 9 | Sydney | Australia | 10.7% |
| 10 | Madrid | Spain | 10.6% |
| 11 | Munich` | Germany | 10.0% |
Source: Knight Frank
