Johannesburg, Dubai rank low in global city house price growth

UN-Habitat sees joint fund boosting cities’ empowerment

Chinese cities recorded the strongest mainstream house price growth in 2017 and seen the biggest rise in the prime property market, new research has found.Price grow by more than 10per cent in eight Chinese cities in the mainstream market, led by Chongqing with an increase of 58.9 per cent and only two European cities, Amsterdam and Dublin, made the top 10 with rises of 20.9per cent and 12.3per cent respectively.

Vancouver saw annual growth of 16per cent, New York was up 11.7per cent and Shanghai up 10.7per cent. Paris recorded growth of 8.3per cent, Sydney 5.8per cent and London just 2.3per cent, according to the report from international real estate advisor Savills.Prices were unchanged in Mumbai and Warsaw and fell in Rio de Janeiro by 4.4per cent, in Stockholm by 5.2per cent, in Shenzhen and Johannesburg by 6.3per cent and in Dubai by 7.9er cent.

In the prime property markets there were more falls than growth, including long established markers such as London, New York, Stockholm and Moscow but values in these cities are still higher than they were ten years ago. San Francisco was the only US city to feature in the top 10.Chongqing also saw the highest growth in the prime sector at 48.5per cent, followed by Tianjin at 39.4% and Wuhan at 25.5per cent. Vancouver, Dublin, San Francisco and Amsterdam also make the top 10 with growth of 16per cent, 12.6per cent, 12.3per cent and 10.7per cent respectively.

Hong Kong remains world’s most expensive city for prime property at US$4,000 per square foot, followed by Tokyo at US$3,280, London US$1,770 and New York US$1,570, according to Propertywire report.“This outperformance by the mainstream housing markets across key world cities is part of a longer term global trend. Prime values rose first and fastest after the global financial crisis, but some are now hitting a high plateau. It’s now the turn of the mainstream markets to play catch up,” said Yolande Barnes, head of Savills world research.

“Prime residential markets around the world reacted quickly to quantitative easing by central banks and the consequent yield shift in line with low interest rates. This was a one off yield shift and expectations are that central banks are moving towards raising rates, reducing the potential for price growth,” she explained.“Importantly, while some cities have recorded small falls, we generally don’t expect these to become significant, but we do expect prices to remain relatively stable, on a high plateau for some time, though we will continue to see volatility in oil dependent economies, for example,” she added.

According to the report, cities such as Hong Kong, San Francisco, Sydney and Vancouver, which have now seen strong 10 year growth, are expected to hit a high plateau in the next year or two.

European cities such as Amsterdam, Madrid, Paris and Dublin, where prime residential value growth ranged from 5.1per cent to 12.6per cent in 2017, are poised for further price growth, though they too are expected to hit a long term peak within the next five years.

“With large amounts of capital pointed at Hong Kong from the mainland, and held at bay only by capital controls, it is difficult to see a scenario where capital values will fall significantly,” Barnes pointed out.

“Equally, unless capital flows from the mainland were dramatically relaxed, it’s hard to see scope for further significant value uplifts. Prime Hong Kong residential values look set to occupy the same high plateau as many other world markets for a while,” she explained.Tokyo, where large, centrally-located, prime properties are rare, ranks as second most expensive for prime property, with values averaging US$3,280 per square foot after rising 10per cent in the year, more than five times the mainstream average of just US$630, and the biggest different between prime and mainstream across the Savills measures.

Meanwhile, UN-Habitat Executive Director Ms. Maimunah Mohamed Sharif believes that there was a great value in the United Nation’s Joint Fund in empowering cities.“UN-Habitat sees great value in the Joint Fund’s ability to further the role of cities in reducing poverty, and in driving sustainable, inclusive growth,” Ms. Sharif said in a video message broadcast during the launch of the Joint Fund for the 2030 agenda which took place in New York on Monday.

She added that UN-Habitat was extremely delighted to link its ongoing effort with the World Bank and several other UN agencies to the Joint Fund through Multi-Partner Implementation Facility for Sustainable Urban Development.

The Executive Director said that the partnership which was developed in response to the adoption of the SDGs and the New Urban Agenda had the goal of catalyzing effective, integrated and coordinated support to governments, and accelerate investments in sustainable urbanization at scale, by drawing together committed partners from public and private sectors. In 2017, Member States endorsed this initiative through two separate resolutions, she added.