Britain’s robust property market pales in comparison with global house price growth, according to a review by Savills. Despite media attention focussed on emerging markets such as Poland and Bulgaria, even traditional markets such as Canada, Sweden and Spain all outperformed the UK.
Housing markets of the major advanced economies are gradually slowing from the rapid acceleration in prices of the last few years, but most have still seen over 5% real annual price increases.
‘Falling interest rates and financial innovation have made housing more affordable, rising incomes and demographic factors have stimulated demand, interest in owning a second home has grown, and new markets have opened up in places such as central and eastern Europe and Asia,’ explains Charles Weston-Baker of Savills.
Poland now leads the Savills word house price league followed by Denmark and Bulgaria. Singapore has now moved up the league and has reached the double digit inflation. Mr Weston-Baker cautions when interpreting the available market data from emerging markets in Eastern Europe as it often comes from new properties constructed by developers which only represent a fraction of the total housing stock.
The property market in Portugal is out of synchronisation with the rest of Southern Europe. Plentiful supply and European Central Bank interest rate rises caused the market to stagnate in 2006. ‘And prospects look no better in 2007,’ says Mr Weston-Baker.
Global Property Market
France ? Rises have been less dramatic than other countries such as Ireland, Spain and the UK and the rate has been slowing over the past year.
Italy ? Second home sector saw an average price rise of 5.5% in 2006 but it is not expected to grow much in 2007. Supply of holiday quality holiday homes is limited, keeping the prices buoyant.
Spain ? Strong regional differences in prices with the strongest growth in the north and in the Balearic Islands. Excess supply in other areas is weakening growth but most commentators expect a soft landing with future moderate price growth and a sharp reduction in new build.
Switzerland ? House price inflation has been moderate compared with much of the rest of Europe, though higher than in Germany.
Caribbean ? There is considerable variation in the amount of interest between islands with Barbados commanding the highest prices.
Dubai ? One of the most active emerging markets of recent years with developments selling out off plan.
Singapore ? The housing market had a record breaking year in 2006 with prices in areas surrounding the prime market locations likely to experience significant growth in the year to come.
For more information, visit www.savills.co.uk/abroad