Global house prices in upward momentum Q1 2016 as Turkey leads with 19% surge

The first quarter of 2016 witnessed upward momentum in house prices, rising in 31 out of the 45 world’s notable housing markets which have so far published housing statistics, using inflation-adjusted figures.

Prices surged in most of these markets during the year to Q1 2016 in Turkey and many parts of Europe. The Asian countries witnessed a contrast, except China which saw a 16.64 percent price surge following government measures to support the housing market.

Despite a collapsing currency, dissatisfaction with the government, chaos on its doorstep in Syria and Kurdish Iraq, and rising internal tensions, Turkey came out tops as the strongest performer in a global  market survey by Global Property Guide, a research house and web site dedicated to residential property, covering market trends in 101 countries.

This performance, which recorded a y-o-y increase of 11.61 percent from last year, was boosted by strong foreign investment and growing population reminiscent of Nigeria’s real estate sector before the current economic slowdown from which the sector has taken a strong bashing.

Strong demographics, foreign investment inflows, emerging middle class with strong buying power and a wide housing demand-supply gap boosted the property market in Nigeria and pushed house prices and value appreciation to a level that confounded market economics.

The survey reveals that the world’s housing markets remain two-tiered, noting that most of Europe and North America experienced strong price rises while Asia, the Middle East and New Zealand  slowed sharply during the year to Q1 2016.

Besides Turkey and China, prices also surged in three other locations—Sweden, Romania and Qatar which recorded 12.1 percent, 11.55 percent and 9.27 percent respectively, while the biggest y-o-y price declines were in Russia (-13.04 percent), Mongolia (-11.93 percent), Puerto Rico (-10.33 percent), Hong Kong (-9.91 percent), Egypt (-9.49 percent), and UAE (-9.26 percent).

China’s housing market soared. In Shanghai, for instance, the price index of second-hand houses surged by 16.64 percent, in sharp contrast to a decline of 2.9 percent in the same period last year and the highest annual rise since Q2 2008. During this quarter, house prices in Shanghai rose by 6.18 percent.

The survey points out that Russia remains the weakest housing market globally on account of low oil prices, the collapsing ruble, and a steep economic contraction. Russian residential property prices plunged by 13.04 percent y-o-y in Q1 2016, which was worse than last year’s decline of 9.65 percent.

South Africa is the only African market surveyed and, unfortunately, housing market outlook in that country is bleak with the economy expected to post meager growth this year. The price index for medium-sized apartments fell by 1.3 percent during the year to Q1 2016, in contrast to the annual increase of 1.52 percent the previous year. House prices dropped 2.18 percent q-o-q in Q1 2016.

 The Middle East housing markets are weakening such that all of its four markets included in the survey performed worse in Q1 2016 than the previous year. Whereas Qatar’s property market is now weakening rapidly, Dubai’s housing market remains depressed, with the residential property prices falling by 9.26 percent during the year to Q1 2016. This is worse than the annual drop of 2.72 percent in Q1 2015 and its fourth consecutive quarter of y-o-y declines.

House prices fell by 0.33 during the latest quarter in this emirate which, before now, was the world’s most burgeoning and glamorous real estate market, attracting investors and home buyers from every corner of the globe who had interest in its domes and skyscrapers.