The index saw a 5.9% increase in emerging markets and a 2% increase in developed markets. This in itself is hardly unexpected. Emerging markets, almost by definition, have much more room for growth than developed markets.
Again, however, there were major discrepancies between the performance shown between various cities in both the emerging markets and the developed markets.
Asia leads the way
The top performer by far was Asia and in particular China. Out of the ten top-performing cities no fewer than half were in Asia, of which three were in China (including the overall top-performer Xi’an) with the other two being in India.
Interestingly, the other five were all in Europe, although in a couple of cases only just.
The list of top-performing cities is as follows:
- Xi’an (China) 25%
- Budapest (Hungary) 24.2%
- Hyderabad (India) 18.3%
- Ahmedabad (India) 15.3%
- Wuhan (China) and St Petersburg (Russia) 14.6%
- Porto (Portugal) 13.6%
- Chongqing (China) 12.1%
- Zagreb (Croatia) 11.4%
- Athens (Greece) 11.2%
The Middle East and Australia suffer most
China managed to escape house price falls, but India was not so lucky with Delhi coming in sixth place on the list of cities which saw the steepest price reductions.
The country which saw the steepest overall reductions was Australia, but given that its housing market has spent most of the recent past going full steam ahead, it was arguably long overdue for a break.
The UAE also did badly, but again its housing market was probably due a break anyway.
Having said that, while the UAE has worked very hard to diversify its economy (and, in particular, to make itself a tourist destination), it is still very much dependent on the state of the oil industry (and while the countries and cultures may be very different, similar comments apply to Aberdeen).
The worst performing cities:
- Sydney (Australia) 9.4%
- Dubai (UAE) 9.3%
- Melbourne (Australia) 7.8%
- Abu Dhabi (UAE) 7.8%
- Ljubljana (Slovenia) 7.5%
- Delhi (India) 7.1%
- Jerusalem (Israel) 5.5%
- Darwin (Australia) 5%
- Vancouver (Canada) 4.9%
- Aberdeen (UK) 4.8%
Clear competition within individual countries
While countries may put on a common front towards the rest of the world, there can often be a high level of internal competition between individual cities within them.
In the UK, for example, London and Manchester could now reasonably be viewed as direct competitors to each other, both trying to attract the most skilled workers and the most valuable employers.
Based on the results of the index, the same appears to be applying in many other countries.
For example, in New Zealand Wellington saw a rise of 9.1% but Auckland was down 2.9%, in Canada Ottawa was up 6.3% but Vancouver was down 4.9% and in the US, Phoenix was up 5.8% but Seattle was down 1.3%.
*Mark Burns in the managing director of UK Property Investment firm Pure Investor