Prime residential property prices across the world’s major cities increased on average by 4.4% in the 12 months to June 2016, with Vancouver leading Knight Frank’s Prime Global Cities Index for the fifth consecutive quarter.
Vancouver’s surge in house prices of 36% over the past year was by far the highest in the world, but the new 15% tax on foreign buyers is expected to slow the growth, according to Knight Frank.
“Vancouver joins an expanding club of cities, [which includes Hong Kong, Singapore, Sydney and Melbourne] where policy-makers are taking steps to control the flow of foreign capital into their housing markets in order to stem demand and improve affordability for local residents,” Kate Everett-Allen, head of international residential research at Knight Frank, said in an emailed statement.”
The city with the second-highest price growth was Shanghai, at 22.5%, followed by Cape Town at 16.1% and Toronto, with a 12.6% increase over the same time period.
“Other top performers this quarter include Shanghai, Cape Town, Toronto, Melbourne and Sydney; all saw annual price growth reach double figures in the year to June,” she added.
Interestingly, annual price growth in Rome and Madrid now exceeds that in London and New York
Hong Kong’s luxury residential market performed the worst, with prime prices falling 8.4% over the past 12 months. Prices in Taipei dropped 7.7%, Moscow 5.2%, Delhi 4.9% and Paris 2.7%.
Everett-Allen continued: “The majority of our top ten ranking cities have been on the receiving end of new cooling measures in the last 12 months. From interest rate hikes to fees for foreign buyers, higher land taxes, or new rules on the number of second homes that can be acquired, lowering price inflation is high up government agendas which suggest that a year from now the cities populating the top ten rankings could look very different.”