World Cities Property Price Growth Slowing

World cities property price growth is slowing according to the latest report from international real estate consultant Knight Frank.

Despite the global economy’s strong performance, increased use of macro prudential measures to curb price inflation along with escalating affordability constraints are keeping a lid on World cities property price growth.

The same report from Knight Frank one year ago saw twelve cities exceed growth of 20 per cent per annum. However, the latest report showed just one global city exceed that level.

The Indian city of Surat recorded property price growth of 22.3 per cent, due to an inordinately low base in Q1 2017, caused by the unprecedented demonetisation of high value currency in the country.

Europe fared well however in the World property price growth table, with eleven of the top twenty cities in the continent.

Rotterdam (14.8 per cent), Edinburgh (12 per cent), Porto (11.7 per cent) and Sofia (11.3 per cent) have now joined long-standing frontrunners such as Berlin (14.9 per cent), Budapest (14.4 per cent) and Reykjavik (11.8 per cent).

Southern Europe had mixed fortunes when it came to World cities property price growth. While Porto, Malaga and Madrid all sit high in the rankings with annual growth of 11.7 per cent, 10.4 per cent and 10.3 per cent respectively, Italian cities featured much further down with some even showing negative growth.

Vancouver continued to show strong growth of 15.4 per cent but was the only Canadian city to make the top twenty, with Toronto dropping to 69th place with growth of just 4.3 per cent.

The United States only had two cities make the top twenty, with Seattle showing growth of 12.9 per cent to take 10th spot, while San Francisco took 19th place with growth of 11.2 per cent.

Knight Frank’s Kate Everett-Allen commented: ‘In the US, despite three rate rises in the year to March 2018 (and a fourth since) average prices across the 15 cities included in our index increased by 6.8 per cent over the 12-month period. The comparable figure for the UK’s eight cities is 4.9 per cent with Edinburgh out in front and Aberdeen the weakest performer.’

Divergent markets were very evident not just at a regional level but at a country level as well. The ten countries with the largest gap between their strongest and weakest performing city was synonymous with a list of the world’s largest economies. India led the list with a gap of 27 percentage points between Surat (22 per cent) and Delhi (-5 per cent).

Overseas property investors may want to study the list to check World Cities property price growth before investing.