Property price growth in Dubai and much of Asia is slowing amid signs that the global real estate market has lost its main engines of growth resulting in a rise of just 0.1% in the third quarter of 2014.
For the first time in two years Knight Frank’s Global House Price Index has come close to falling into negative territory. Muted growth in the third quarter comes on the back of jitters over the global economy, a lingering malaise in Europe and, in the US, a slower than expected housing recovery.
Ireland now tops the rankings, having languished at the foot of the table for most of 2009 to 2012. Prices increased by 15% in the year to September but remain 39% below their pre-crisis peak in 2007.
Ireland isn’t the only country to see a remarkable turnaround in fortunes over the last 12 months as Spain and the UK have also seen an upturn, albeit in Spain’s case this translates into a slower rate of decline as opposed to positive price growth. Hong Kong and Dubai, by comparison, have seen price growth slow.
Dubai mainstream residential prices fell by 5.2% in the three months to September, the emirate’s first quarterly decline in prices in the last four years. The current mismatch between demand and supply is behind the fall, according to Knight Frank.
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It means that residential sales in Dubai have fallen sharply in recent months and there is a steady stream of new schemes reaching completion, which in turn is exerting downward pressure on prices.
China’s slowdown continued with 58 of the 70 cities tracked by the National Bureau of Statistics recording price falls in the year to September while two cities saw prices stay the same and 10 recorded price increases. The city of Xiamen saw the strongest annual rise of 4.9%.
In the United States the price of a single family home increased by 4.8%, down on last quarter’s figure of 6.2%. Miami is the key city bucking the national trend, with prices rising by 10.3% year on year.
Analysis by world region shows the Middle East recorded the strongest price growth at 9.5% in the year to September. Quarterly analysis shows all the world regions to be borderline anemic with South America the top performer recording 1.6% growth. This was due predominantly to Brazil and Colombia’s steady performance over the three month period.
Fewer countries are reaching the heights of double digit price growth but it’s not all bad news, according to Kate Everett-Allen of Knight Frank’s international residential research team.
‘No country has recorded an annual fall in house prices in excess of 10% for three consecutive quarters suggesting a slight convergence in the performance of the 54 housing markets tracked,’ she said.
This article was republished with permission from Property Wire.