Malaysian property prices continued to rise in the year ending June 2016.
As the highest-ranked Southeast Asian country by price rises in the latest global research report from Knight Frank, Malaysian property prices rose by 7.2 percent year-on-year, while the difference from Q1 to Q2 was a mere 0.5 percent, possibly indicating a slowing of the upwards trend of Malaysian property prices.
Knight Frank reported that steady price growth is the new norm as the outliers have largely disappeared from the index in recent quarters.
Kate Everett-Allen from Knight Frank analysed the latest index results.
She said that over recent quarters Turkey, Sweden and New Zealand have occupied the top positions in our Global House Price Index.
Key Asian markets have dominated the lower ranks.
This quarter is no different.
The overall aggregate index has followed a similar narrative, consistently recording 4 percent annual growth, or thereabouts, for the last two years.
Closer inspection shows the extremes are moderating. The percentage points separating the strongest and weakest performing housing market have narrowed from 33 points in Q2 2015 to 23 this quarter.
For the western world, a prolonged period of historically low interest rates and timely injections of QE may in part be responsible.
Of the top five performing countries, Turkey and Sweden are the only two markets where price growth has slowed compared with last quarter, down from 19 percent to 14 percent and from 13 percent to 9%\ percent respectively.
The Index tracks nominal price growth but if Knight Frank considers real price growth, where inflation is stripped out, New Zealand finds itself in first place with 11 percent annual growth whilst Turkey – with inflation in excess of 7 percent – is pushed down into 13th position.
The latest data suggests the build-up to the Olympic Games was unable to act as a counterbalance to Brazil’s slowing economy and housing market.
Average prices slipped by 0.7 percent year-on-year whilst Rio saw prices fall by 3.6 percent over the same period.
China’s average house price growth stood at 5.9 percent in the 12 months to June but the gap between the top five performing cities (Beijing, Guangzhou, Sanya, Shanghai and Shenzhen) and China’s remaining cities is widening.
The government has unveiled a series of measures in recent months to either spur on, or curb investment, depending on the level of activity in the different city tiers.
The Asian markets of Hong Kong, Taiwan and Singapore occupy three of the bottom five rankings this quarter.
Weak economic growth, stringent cooling measures and the strong U.S. dollar continued to hamper sales rates.
All eyes in the coming months will be on the U.K. and the U.S.
Both housing markets have been level pegging in the last year, recording annual growth of 5.2 percent and 5.1 percent respectively.
The outcome of the U.S. presidential election and the negotiations following the U.K.’s Brexit decision will ultimately determine the confidence of owner occupiers and the flow of investor capital across a large part of the world in the short to medium term.
The Knight Frank Global House Price Index, established in 2006, allows investors and developers to monitor and compare the performance of mainstream residential markets around the world.
The Index is compiled on a quarterly basis using official government statistics or central bank data where available.
The index’s overall performance is weighted by GDP on a Purchasing Power Parity basis and the latest quarter’s data is provisional pending the release of all the countries’ results.
