Chinese cities took the top eight spots in a ranking of the world’s hottest housing markets, each recording at least a 25% price increase in the third quarter, according to a report released on Wednesday.
On average, the eight cities saw an annual price growth of 31.8%. Residential prices in the top three overall performers—Nanjing, Shanghai and Shenzhen—increased 42.9%, 39.5% and 34.5% respectively over a year ago, according to Knight Frank’s Global Residential Cities Index.
Among the 13 cities that recorded an over-20% price increase in the third quarter, 10 were in China. Rapid urbanization and rising household wealth is behind the surge, according to the report.
Other findings include:
- House prices increased in 77% of the 150 cities Knight Frank tracks
- Wellington overtook Auckland as New Zealand’s hottest market for the first time in eight years
- Seattle ranked highest in the U.S., with an annual price increase of 11.1%
- House prices in New York rose 1.8%, the slowest in the U.S.
- Budapest, Oslo and Bristol were Europe’s strongest-performing cities
- Out of 33 cities that saw price declines, 20 were in Europe
- Aberdeen in the U.K. and Moscow in Russia were at the bottom of the rankings, recording 10.5% and 10.2% declines in house prices respectively
All eyes are currently on the performance of house prices in the world’s two largest economies: China and the U.S., said Kate Everett-Allen, partner at Knight Frank’s International Residential Research and author of the report. While prices in China’s tier-one cities all accelerated significantly, the U.S. mainstream housing markets differed in their performances.
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Of the 20 U.S. cities tracked by the index, Seattle and Portland outperformed cities in the east coast, recording price growth of 11.1% and 10.9% respectively. Meanwhile, New York only saw a 1.8% annual price increase, landing 102nd place in the rankings.
|Price Trends in Selected Cities|
|New York, US||102||1.8%|
|Source: Knight Frank|
Vancouver was still the strongest market in Canada. However, its global ranking fell to ninth from fifth position in the second quarter. “This shift is not as a result of slowing prices, annual growth is much the same as in June, close to 24%, but [it’s] due to the phenomenal ascent of the Chinese cities which have supplanted it,” Ms. Everett-Allen wrote.
North America as a whole was performing strongly, recording an average annual growth of 6.1%.
In addition to the Global Residential Cities Index, Knight Frank also published its quarterly Prime Global Cities Index in late October. The report monitored the performance of prime residential prices across 37 key cities. In the third quarter, Vancouver topped the rankings with a 31.6% annual price increase.
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