Transparency measures and a clampdown on foreign buyers has pushed the world’s most expensive properties to their lowest levels of growth in more than five years, while London’s slowdown shows signs of improvement.
Prime property has suffered its weakest rise in growth since the end of 2012 over the last three months, according to the latest Knight Frank index.
Average global prices for the most expensive residences rose 2.6 per cent, as the number of cities registering double-digit annual price growth fell from seven to three in the second quarter of this year.
While the Chinese city of Guangzhou still leads the index, growth in prime house prices tumbled from over 30 per cent to 11.6 per cent in the last three months compared with the second quarter of 2017.
Kate Everett-Allen, an international residential research partner at Knight Frank, told City A.M.: "Policymakers across the world not only want to sort out the price of inflation from a house affordability point of view, but they also have a greater desire for transparency... they want to know who is buying homes within their markets."
Everett-Allen added: "There are lots of cooling measures taking place around the world. Singapore has introduced higher rates of stamp duty, Hong Kong has a vacancy tax. Prior to that we have seen Canada making changes to foreign buyer taxes. As a result we have seen the top performers, particularly Chinese cities which were at double digit growth, come right down."
Meanwhile, London’s rate of decline in prime property prices slowed down from 6.3 per cent to 1.8 per cent over the last 12 months compared with the previous year.
As a result London climbed one space higher in the index, and now sits at 37th in the ranking of Knight Frank’s global cities price index.
"After several years of decline that have been largely drive by stamp duty changes and the Brexit vote, we are starting to see property prices getting closer to where purchasers are beginning to feel they get the right value," said Knight frank’s global head of research Liam Bailey.
Bailey added: "The weaker pound certainly helps drive some inward demand, but in normal circumstances you would see an uptick in demand, and you haven’t seen it this time."
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