The latest Knight Frank Global House Price Index has cast a very interesting light on the worldwide property market, highlighting those in favour and those where markets are starting to turn down. The latest league table takes into account the 12 month period ending the first quarter of 2016 and will prove rather useful for those looking at future real estate investments.
We guarantee you will never guess the top 10 and indeed many would struggle to guess the top five real estate markets over the last 12 months!
The top five
Turkey is by far and away the best performing real estate market over the last 12 months with 15.3% asset value appreciation, Sweden is second at 12.9%, New Zealand is next at 11% followed by Lithuania at 10.5% and Malta at 9.9%. When you bear in mind the terrorist troubles associated with Turkey at the moment it will perhaps come as no surprise to learn that the market is starting to turn down and this level of appreciation is unlikely to be replicated over the next 12 months.
Looking at the other markets in the top five, the Swedish market is still moving higher, the New Zealand market is starting to run out of steam but Lithuania and Malta are still very much on the up. This league table is a good indicator of the best performing property markets and the current trends.
Completing the top 10
Interestingly Australia has fallen out of the top five with just 8.7% appreciation over the 12 month period in question, Mexico is next at 8.1%, Israel follows at 7.9% with Austria at 7.6% and Ireland at 7.4% making up the top 10. The only market in this particular group which is showing signs of a slowdown is Australia but when you bear in mind the recent performance of the economy, and the real estate market, is this really a major surprise?
Even though the UK property market has not managed to make it into the top 10 it is worth remembering that UK property prices have held up extremely well in light of the 2008 worldwide downturn and the problems within Europe. Those countries making up the top 10 offer a mixture of long-term growth and more speculative “hotspot” opportunities whereas many see the UK real estate market as a long-term project.
Factors to look out for
Over the next few months we are likely to see a round of interest rate reductions across the globe as a means of supporting economies both within Europe and outside of Europe. There is also the issue of debt levels amongst the general public and how these may be impacted as and when mortgage rates finally turn upwards. Even though this is unlikely to occur in the short to medium term, many experts are now advising property investors to introduce a financial buffer to protect them going forward.
It is also worth noting that currency factors will likely play a major role in the short to medium term especially when you bear in mind the fall in the British pound. The UK real estate market was already a favourite amongst many foreign investors and now offers even greater value due to the fall in currency rates. There will be many opportunities in the future despite overly negative headlines by some so-called “experts”.