After almost a month into the New Year, a number of prominent reports and analyses on global property markets have been published, notably the most recent Global House Prices Index from Knight Frank. These reports along with official data and statistics from various governments have revealed a number of property markets as investment destinations to watch in the year ahead – some for good reasons, some for bad, and many because of a mixture of factors. Some of the locations worth keeping an eye on in 2016 include:
Sweden
Knight Frank’s analysis showed that Sweden was the strongest-performing housing market in Europe over the twelve months to September. Significant lack of supply drove price growth of 11.1% across the year, and the supply/demand imbalance does not look likely to change. There are concerns about the impact high household debt could have on the banking sector and covered bonds market, though the latter will likely benefit from government intervention if really necessary.
New Zealand
New Zealand saw house prices grow by an impressive 12.6% in the year to September, which put them at 43% above the lowest points of the financial crisis. Prices have risen particularly rapidly in Auckland, the most popular city in the country. According to Prime Minister John Key, speaking in October, this is the result of high population growth rates and serious supply issues, and the government intends to carry out a large amount of new building activity to try to combat rising demand.
Canada
The US has had its fair share of attention recently, but in terms of price growth it lags behind its Northern neighbour. Knight Frank’s Index showed growth of 5.6% in Canadian house prices in the year to September 2015. Major cities, especially, have seen rapid growth fuelled partly by low interest rates and the resultant affordability of mortgages. However, the country is vulnerable to continued low energy prices, and many investors fear this may lead to a crash.
Hong Kong
With prices rising 16.7% in twelve months according to Knight Frank, Hong Kong has certainly been delivering when it comes to capital growth. However, it may have been delivering a little bit too much. In October, Hong Kong was singled out by UBS as the most unaffordable city in the world. UBS also called that the city is the second most likely to experience a bubble, with London taking first place. Furthermore, the struggles beleaguering China’s economy at present also have a lot of potential to hit Hong Kong.
Australia
Australia has seen strong growth in house prices, though is not measuring up to its neighbour New Zealand at this moment in time. Even so, the country delivered one of the fastest growth rates in the world, according to Knight Frank, with prices increasing 9.8% in the year to September. A lack of affordability and new fees for investors located overseas and purchasing new-build properties are, however, impacting on its viability as an international investment market. For these reasons, Knight Frank does not expect it to appear in next year’s top ten for growth. It is also worth noting that Sydney has recently been called the third most overvalued city in the world by UBS.
Author Bio
The Overseas Investor are experts in international property investment, with a large range of overseas property investment opportunities throughout Europe and Asia.
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