Property prices in Turkey rise at fastest level

Property prices in Turkey have increased faster than those in other countries for the fifth consecutive quarter, according to a market report.

The latest Knight Frank Global Property Price Index reveals that property prices in Turkey increased by 13.9 per cent in the year to the end of the third quarter of 2016.

However, the pace of property prices in Turkey have slowed in the past three months, with New Zealand fast closing the gap. Year-on-year property prices in NZ rose by 13.5 per cent, but in the last quarter they were up by 5.8 per cent while Turkey prices rose by just 3.5 per cent.

In total, property prices rose in 44 of the 55 countries tracked by the index. Across the board, the global average property price grew by 5.3 per cent. The highest rate for two years.

However, whereas three years ago, 22 per cent of countries recorded double-digit annual price growth, only 9 per cent fell into this bracket in the latest release.

According to Kate Everett-Allen, head of Knight Frank’s International Residential Research, property price falls in the UK and United States have not been as severe as some may have expected, given the political events of recent times.

“The expected slowdown in US house prices in the run up to the Presidential Election failed to materialise,” Everett-Allen explained. “The rise in September of 0.8 per cent month-on-month was the largest monthly rise since August 2013 contributing to an annual increase of 5.5 per cent.”

She continued: “The UK economy is showing some resilience following the vote to leave the European Union (EU) in June. Average house prices rose 1.3 per cent in the three months after the referendum and 5.4 per cent in the 12 months to September. The market remains underpinned by the on-going fundamentals of undersupply and low mortgage rates.”

However, Everett-Allen believes that a slowdown could materialise next year.

“The consensus view is that 2017 will be a bumpy ride both economically and politically, with stimulus coming in the form of fiscal rather than monetary policy,” she predicts. “That said, low rates are likely to persist in Europe at least, but hikes in the US will result in a stronger dollar with implications for global capital flows and emerging markets.”

Article published 12th December 2016