Global house prices rising: Indonesia and Malaysia outperform Singapore

Global house prices rising; Indonesia and Malaysia outperform Singapore
Sep 10, 2013 – PropertyGuru.com.my

House prices in Indonesia and Malaysia are rising at a faster pace than those in Singapore, according to the latest Knight Frank House Price Index which was published yesterday.

Indonesian prices saw a 12.1 percent year-on-year rise to the end of the second quarter, while Malaysian prices rose 6.0 percent over the same period. This ranks the countries IN 7th and 17th respectively in the report of 55 countries.

By contrast Singapore priced (non-landed private properties) rose just 4.5 percent – ranking the country in 26th place of global house price. Singapore is ranked alongside Iceland and Luxembourg in terms of the percentage rise in house prices.

Elsewhere European property prices rose for the first time since 2010, while house prices around the world rose by 2.4 percent in the second quarter of 2013, the highest rate of annual growth since Q2 2010.

Prices rose in 37 of the 55 countries tracked by the index in the second quarter of 2013. This compares to 27 two years earlier which points to an improving global picture.

Dubai leads the annual rankings, recording price growth of 21.7% in the year to the end of June. The emirate’s housing market has gained momentum since late 2012, while its prime market led the way, mainstream prices are now following suit.

For the first time since 2010, European countries recorded positive annual price growth. However, the average 0.7 percent increase over the past 12 months masks a sharp divergence in performance between individual countries, with Turkey the strongest performer (up by 12.2 percent) and Greece the weakest (down by 11.5 percent) year-on-year.

The economies of some key emerging markets are showing signs of strain and this is being reflected in their housing markets’ performance. Annual price growth in Brazil, for example, stands at 11.9 percent, down from 18.4 percent a year earlier.

The U.S. housing market recovery appears to be on firmer ground, with its second consecutive quarterly rise. Nationally, prices rose by 10.2 percent in the last 12 months, with the cities of Atlanta and Chicago recording the strongest growth in the second quarter.

It is interesting to note that the world’s two largest housing markets – the U.S. and China – are experiencing contrasting fortunes; quarterly growth reached 7.1 percent in the U.S. but hovered around 0 percent in China.
For the fourth consecutive quarter the bottom ten rankings have all been occupied by European countries.

While Greece, Spain and Portugal dominate the headlines, the sluggish markets of The Netherlands, Hungary and Croatia are often overlooked. These countries recorded price falls of 8.5 percent, 8.2 percent and 5.5 percent respectively in the year to June. Tight lending conditions, high levels of consumer debt and rising unemployment are depressing market activity.

The U.K., after three years of negative or stuttering price growth in its mainstream market, has found some traction. Prices rose by 2.6 percent in the second quarter.

Knight Frank concluded that the medium term outlook is muted. Europe has been the main drag on the global housing market’s performance in recent years but growing confidence is being tempered by deterioration in the outlook for a number of the large emerging market economies.

Thailand is not included in the report due to a lack of creditable data.

Top ten fast growing countries by property prices
Rank | Country | 12-month % change from Q2 2012-Q2 2013

1 Dubai, UAE 21.7%
2 Hong Kong1 19.1%
3 Taiwan 15.4%
4 China2 14.8%
5 Colombia 12.7%
6 Turkey 12.2%
7 Indonesia 12.1%
8 Estonia 11.9%
9 Brazil 11.9%
10 Ukraine 10.9%

Others
17 Malaysia 6.0%
26 Singapore 4.5%

The Knight Frank Global House Price Index was established in 2006 is the definitive means for investors and developers to monitor and compare the performance of mainstream residential markets across the world. The index is compiled on a quarterly basis using official government statistics or central bank data where available.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

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