The Chinese city of Shenzen has topped new research which looked at price increases of mainstream residential property prices last year.
The Global Residential Cities Index, published by Knight Frank, took its Global House Price Index one step further, tracking mainstream residential prices on a city rather than country basis. The new index covers 165 of the world’s key urban residential markets.
The Global Residential Cities Index, which is based on official house price data for mainstream residential markets, increased by an average of 4.4 percent during 2015. More than 121 of the 165 cities tracked by the Index saw house prices either rise or remain flat.
The Chinese city of Shenzhen lead the rankings with price growth of 47.5 percent recorded during 2015. More than 22 percentage points separated Shenzhen from the index’s second-ranked city – Auckland (up by 25.4 percet).
In 2015 first-tier cities in China saw strong demand on the back of the relaxation of policy restrictions which boosted market performance. Shenzhen is fast becoming one of China’s key technology hubs, its population of 10 million has an average age of 30.
Budapest I Hungary, where prices increased by 16.3 percent in 2015, was the strongest-performing capital city within the Index. The city’s comparative value, combined with an exclusive investment immigration bond programme for Chinese nationals, has fuelled demand.
Of the twenty U.S. cities included in the Index, Portland (11.4 percent) and San Francisco (10.4 percent) were the strongest performers, with Washington DC the weakest (1.7 percent).
Although none of the U.S. cities saw prices decline, no single city could compete with Vancouver which proved North America’s top performer with prices rising 11.9 percent on an annual basis.
The Indian city of Chandigarh occupied the bottom ranking this quarter. Here prices fell by 7.7 percent year-on-year. Despite cutting interest rates four times in 2015, India’s base rate still stands at 6.75 and the economy has faltered impacting on household income.
Of the 43 cities which saw house prices decline in 2015, 20 were located in Europe, with the southern European economies well represented. Cities in Greece, Italy and Cyprus occupied four of the bottom five rankings.
Urban and rural housing markets are increasingly polarised when it comes to price performance. According to the World Bank, 54 percent of the world’s population currently lives in cities, and by 2045 the urban population will rise by another 2 billion to 6 billion, suggesting the pressure on urban prices looks set to intensify.
Many Southeast Asian cities are not included in research rankings such as this Index due to the lack of current and transparent data.
