The global housing market suffered its worst performance for more than two years in the third quarter of 2011 according to UK property consultancy Knight Frank.

The company’s Global House Price Index rose by just 1.5% in the year to September 2011 – the worst level recorded since the second quarter of 2009 with house prices falling in more than half of the countries monitored in the third quarter.

Not surprisingly, Greece was one of the worst-performing countries, with prices falling 4.1% year-on-year. Hong Kong was the strongest, with prices rising 19% over the same period. However the city-state saw its prices drop 1.1% in the third quarter.

“The third quarter saw mounting pressures on the global economy with politicians seemingly helpless to get to grips with the eurozone debt crisis,” said Knight Frank. “This has reawakened fears of a double-dip recession, not just in Europe but around the world. Unsurprisingly, this economic uncertainty has been reflected in the performance of the world’s housing markets.”

At a regional level Europe was the worst performer, being the only area to record a negative growth (-0.5%) while luxury markets continued to hold strong.

“Luxury housing markets appear to be better insulated from this new weaker phase than mainstream markets,” added Knight Frank. “This is due in part to the scale of global wealth generation, the ongoing search for ‘safe-haven’ investments and the growing divide between prime markets in the West and the rest of the world.”

Other notable countries include China, 6th in the table with a 8.9 per cent rise, Germany, 20th with a 2.8 per cent rise, the US, 39th with a -3.9 per cent loss and troubled Greece, which came 40th, with the average house losing -4.1 per cent of its value.

Canada’s housing market fared well with prices up 4 per cent in 2011 compared to the year before. Rising property prices in Vancouver’s housing market have certainly contributed to this.

Growing demand from rich international buyers, particularly among billionaires, is helping to create a new global super class of property in some of the world’s most important cities, according to fresh research.

These high-end global destinations continue to defy the wider economic downturn, with property prices in the top ten cities having increased by 10% in the first six months of 2011 compared to the corresponding period last year, the latest Savills Research global billionaire property index shows.

Hong Kong is the most expensive place to buy a home globally in value terms with average property prices standing at £6,700 (Cdn $10,800) per square foot, up 83% from December 2005 to December 2010 and an additional 10% on top of that to the end of June 2011.

In second place is Tokyo at £5,190 ($8,400) per sq.ft., followed by Paris at £3,270 ($5,300) per sq.ft. and London at £3,090 ($5,000) per sq.ft..

There has been significant capital growth in emerging markets. Russia (Moscow), ranked fourth, has witnessed values increase 110% from December 2005 to 2010 and a further 2% increase this year to take it to £2,520 ($4,000). Singapore has seen a 144% and 16% rise, while Mumbai has appreciated 138% and 7%.

The 10% average prime property price growth recorded in the top cities worldwide compares to average price growth of 6% for ordinary properties in the same cities,

Yolande Barnes, director of residential research at Savills, commented: “We recently identified ten world class cities whose real estate markets have more in common with each other than the mainstream markets of the counties in which they operate and they are all attracting billionaire’s dollars, whether generated at home or overseas.

“Global billionaires can make any country their home, and often have several different residences across the globe. Most will seek a base where they are doing business. This has the effect of funnelling global equity into the very best residential real estate, a rare commodity in any city. Billionaire buyers demand the best international standards of accommodation and are paying prices to match, creating a super class of global billionaire homes,” she added.

The Top 10 ‘World Class’ cities are as follows: Hong Kong, London, Moscow, Mumbai, New York, Paris, Singapore, Shanghai, Sydney and Tokyo.

Source: International Estate Agent Today

The Chinese property market saw USD $5 billion-worth of investment transactions take place in the second quarter of this year says the latest edition of Jones Lang LaSalle’s Asia Pacific Capital Markets Bulletin, with Australia coming out as the region’s favourite destination for cross-border residential buyers.

“Sound domestic demand for real estate by occupiers and investors, combined with relatively strong corporate/household sector and high savings rates is expected to drive continued short term real estate markets’ performance to the remainder of the year,” JLL told OPP this week.

“With domestic deals chalking up USD $11.2 billion alone” across the Asia Pacific region, says the report, “cross-border Asia money accounted for USD $4.5 billion while inter-regional funds made up the total at USD $3.3 billion.”

Stuart Crow, Head of Asia Pacific Capital Markets at Jones Lang LaSalle told OPP that “investors who are interested in diversification of their portfolios are likely to be attracted to real estate in the region, based on cash flow from rent with the potential to keep pace with inflation.”

Australia emerged as a top favourite for inter-regional investors, says JLL, not least because it is “one of two AAA-rated countries in Asia Pacific, with good fundamentals of transparent real estate markets and economic links to the rest of Asia.”

Jones Lang LaSalle has been based in the Asia Pacific property sector for more than 50 years and has 20,800 employees operating in 77 offices in 13 countries across the region.

Source: Overseas Property Professional