China and the U.S. Take Divergent Paths on Housing Prices

Global house prices experienced its weakest growth in four years as concerns about China’s economy continue to rattle stock markets around the world. Home values rose by only 0.1% in the year through June, the weakest rate recorded by Knight Frank’s Global House Price Index since the last quarter of 2011. China, whose recent stock market declines have spilled to the rest of Asia, the U.S. and Europe, saw a 5.7% decline in property prices in the second quarter of 2015, compared with the same period in 2014. Conversely, the U.S. had a 4.5% year-over-year growth in the second quarter of 2015, with the average price of a residential property up 7.6% since the start of 2014, reported London-based Knight Frank. “Housing prices in China and the U.S., two countries which together account for around 33% of global GDP, are following divergent paths,” said the real estate consultancy in its report. On Tuesday, California-based CoreLogic reported that home values in the U.S. had gone up 6.9% year-over-year in July, with several states reaching near 40-year records. “Low mortgage rates and stronger consumer confidence are supporting a resurgence in homes sales of late,” said Anand Nallathambi, president and CEO of CoreLogic, in a statement. Remarkably, Colorado had a 10.4% year-over-year increase while prices growth in 10 states, including Florida, Hawaii, New York and Texas, matched or surpassed the nation as a whole, according to the property information and analytics provider. Fifteen states reached new price peaks since January 1976, including Alaska, Iowa and Nebraska. Massachusetts and Mississippi were the only two states with home price depreciation, -2.1% and -0.8%, respectively. The CoreLogic Home Price Index is 6.6% down from its April 2006 peak. The company forecasts that home prices will increase 4.6% from July 2015 to July 2016. In the global scene, Hong Kong continued to take the lead, with mainstream prices up 20.7% from the second quarter of 2014. In Europe, average home prices increased by 2.8% year-over-year through June 2015. The continent had been the weakest-performing world region for 15 consecutive quarters. In Latin America, Colombia was the best performer, with a 7.2% rise between April and June, compared with the same period a year ago. View the Hong Kong listing on Mansion Global. Write to Andrea López Cruzado at andrea.lopez@dowjones.com Follow Mansion Global on Facebook, Twitter and Instagram Write to us at info@mansionglobal.com