Knight Frank: Hong Kong Slows Significantly

Hong Kong

Hong Kong

Global real estate consultancy Knight Frank has launched the Global House Price Index for Q4 2015. Turkey leads the rankings with prices rising almost 20 percent during 2015. 

The index monitors and compares the performance of mainstream residential markets in 55 countries across the world.

Asian mainstream residential markets recorded only 1.9 percent annual price growth, lower than the global average of 3 percent. While a number of markets experienced positive growth, Taiwan and Singapore, which have seen negative growth for a number of quarters, were joined by Hong Kong this quarter, which saw its residential market decline by 3.7 percent in Q4 2015.

The slower rate of growth is attributable to rising supply (more than 11,200 homes were completed in 2015), as well as China’s financial market volatility and the expectation of increasing interest rates.

Economic Uncertainty

According to Nicholas Holt, Head of Research for Asia Pacific at Knight Frank, while long-term growth prospects remain positive, the continued economic uncertainty in the region is likely to weigh on housing market sentiment in the near term.

«Although house prices in Hong Kong increased in 2015, the rate of growth has slowed significantly from 17 percent in the year to September to 7 percent in the year to December 2015. Our outlook for 2016 is muted. We expect the index’s overall rate of growth to be weaker in 2016 than in 2015,» said Kate Everett-Allen, Partner, International Residential Research at Knight Frank.

Weak Housing Markets

The index increased by 3 percent in 2015, up from 2.3 percent in 2014. In total 43 of the 55 housing markets tracked in the Global House Price Index saw prices rise.

Turkey leads the rankings with prices rising 18 percent during 2015. Increasingly viewed as a safe haven for Middle Eastern investors, Turkey is bridging East and West whilst also seeing strong population growth. For the record Ukraine and Greece were the weakest housing markets in 2015, recording prices falls of 12 percent and 5 percent respectively. 

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