Nery Alaev

Hong Kong leads global property prices 

A median 4.7% increase in global property prices is being led by the East Asian city-state alongside Turkey, Iceland, Australia and Sweden. In 21 of 26 of the countries tracked by the Economist House Price Index, prices grew.

Today I’m looking into the individual increases and the reasons behind them, as well as regional differences.

Asia rising

An article published in Property Wire indicates that there has been a 20.8% jump in prices, despite sevNery Alaeveral rounds of cooling measures being introduced in the last five years. Prices in Hong Kong have doubled in this time.

There may be an oncoming dampening however, thanks to the recent economic troubles in China – the troubles may put off mainland investors interest in Hong Kong property.

The second largest Asian riser was Turkey, which saw a jump of 18.8%. Ireland, one of the hardest-hit EU nations during the Global Recession, saw an increase of 13.4% – a sign of economic recovery.

Regional variations

Not all of the countries in the index saw growth however. Depression-struck Greece, recently troubled China and Singapore saw decreases in price. Greece saw a drop of 5.9%, the most dramatic fall out of the five countries that saw decreases in price.

Six markets, including the UK, Canada and Australia, had overvaluations of over 30% according to the report. The UK has demand outstripping supply to the most extent – the issue has become a thorny political subject recently.

In the USA, strong economic growth in recent years has allowed the real estate market to recover, with San Francisco seeing a rise of 75% since 2009.

Nery Alaev

Nery Alaev is the current Director of ESN Investments GmbH, which engages in acquisition and development of commercial and residential property in Germany and Austria