International Property - Knight Frank Predictions for 2012’s Property Market
Property prices in prime central London went from strength-to-strength this year, but 2011 was more turbulent for the wider UK market. There was also a divergence between the performance of prime markets around the world, as the global economic uncertainty weighed heavily on particular markets. Knight Frank’s research team set out what is in store for 2012*
Prime global housing markets
Liam Bailey, Head of Residential Research, said: “Growing global uncertainty and government intervention in the property market, especially in Asia, will weigh on prices in some areas. But some cities, such as Moscow and Bangkok, will shrug off these concerns to register growth of between 10 and 20% in 2012. Paris, Kiev and St Petersburg are all expected to rise by 5 to 10%, with London slotting in next with a rise of 5%.
However, Shanghai, Mumbai, Manama, Hong Kong and Geneva are tipped to fall by between 10 and 20%.
UK house prices
Grainne Gilmore, Head of UK Residential Research, said: “After rising by around 1.3% this year, Knight Frank forecast that mainstream UK house prices will fall by 5% in 2012. Once inflation is taken into account, this will result in a deeper fall in real terms. There will be regional differences in house price performance however, with the south East and London holding up better than the North of England.
“We expect interest rates to remain low, which will support the market to some extent, but we still see prices falling as a "perfect storm" of deteriorating economic performance, public sector job cuts and lack of mortgage lending hits activity and prices.”
The Knight Frank research team expect prime country house prices to slip by 2.8% next year. They fell by 1.7% in the year to September. It is a different story in Prime Central London however, where prices have risen by more than 12% in the past year alone. We expect further rises next year, albeit on a slightly more modest scale, climbing by 5%, with cumulative growth of 24% by the end of 2016.
Andrew Shirley, Head of Rural Property Research, said: “This exuberant asset class slightly underperformed by its own heady standards - prices have trebled in the past 10 years - with annual growth of just 4% in 2011, following slight drops in the final two quarters of the year. But we expect the market to get going again in 2012 and predict values rising by up to 7% over the year.”
Courtesy: Knight Frank
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