Global house price growth has declined for the first time since the start of 2016, according to Knight Frank’s second quarter report released Thursday.
After a first quarter price rise of 6.9%, there was only an increase of 6.1% in the second quarter according to the Knight Frank’s Global Residential Cities Index.
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The index monitors and compares the sales performance of mainstream residential markets in 55 countries.
The number of cities registering an annual price growth above 20% has fallen from 12 to nine in the last three months, the report said, and the dominance of Chinese cities has slipped, now occupying three of the top 10 rankings, down from seven last quarter. The report calls it a deceleration as opposed to a crash, though.
Prices are still rising on a year-on-year basis in all 20 of the Chinese cities Knight Frank tracks within the index, the report said, but now smaller cities like Wuxi, Zhengzhou and Changsha are outpacing the growth in large cities like Shanghai and Beijing, which have seen price growth slow following the introduction of cooling measures. Asia as a whole is outperforming other world regions with prices rising by 10.9% on average across the area.
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"Long-term frontrunners such as Hong Kong, Reykjavik, Wellington and Budapest are holding firm this quarter, but we have seen some new contenders rise up the rankings, most notably key Indian cities," said Kate Everett-Allen, head of international residential research at Knight Frank, in the report.
A year ago, the 10 Indian cities tracked by Knight Frank’s index averaged 3% annual price growth, this quarter, growth has jumped to 12%. Kochi, a costal city inthe country, rose to second place in the index, up from 127th last quarter.
The report’s analysis into key economic and political groupings showed that price growth is accelerating fastest in cities located within emerging markets. Cities in the BRIC (Brazil, Russia, India and China) nations specifically are, on average, outperforming those in developed nations, the report said.
Toronto topped the rankings with prices ending the second quarter 29% higher. Last quarter the city ranked 4th with 24.8% growth, and in the second quarter of 2016 it ranked 22nd with an increase of 12.4%. April’s new tax on foreign buyers in the city, though, may slow further price growth in the coming months, the report said.
Russia/Commonwealth of Independent States, Latin America and Africa were the weakest-performing world regions, according to the report.