International Property

Priced out of the housing market? In these three countries, prices won’t rise this year

Ratings agency Fitch says 19 of 22 markets it monitors will see house prices rise, but not Norway, Greece and Britain

PUBLISHED : Tuesday, 23 January, 2018, 6:34pm
UPDATED : Tuesday, 23 January, 2018, 6:34pm

House prices are forecast to rise this year in most major global markets, but more slowly than previously, and will not increase at all in Britain, Greece and Norway, according to a new report by ratings agency Fitch.

The agency tracks prices in 22 markets, and 19 are expected to see the pace of increases slowing due to risk factors such as rising mortgage rates as quantitative easing policies pursued by some central banks gradually unwind and as bank funding becomes more expensive.

“Some cities that have experienced very steep price increases have cooled or will do so in 2018, with prices and/or turnover falling,” Fitch said in its latest global house prices report.

As for the three countries where prices will not rise, Fitch said that in the case of Norway, the main factor would be plentiful supply and falling immigration in the capital Oslo, while Britain would see a second consecutive year of no growth in prices due to uncertainty over Brexit, stretched affordability and low income growth.

For Greece, Fitch expects a further contraction of house prices in 2018 due to oversupply and a weak incomes, bringing the price correction in the past few years to more than 45 per cent.

In China, meanwhile, the continued application of a range of home purchase and mortgage lending restrictions is expected to keep rises in prices modest in 2018, the report said.

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In a separate global housing report released last week, property firm Knight Frank also predicted a slower pace in house price growth.

Its Global Residential Cities Index, which tracks the movement in mainstream house prices across 150 cities worldwide, registered a decline in its annual rate of growth for three consecutive quarters to September 2017. The overall index increased by 4.7 per cent in the year to September 2017, down from 5.8 per cent.

Reykjavik, capital of Iceland, topped the list with a price growth of 21.3 per cent, Hong Kong ranked fifth with price growth of 15.1 per cent.

Changsha, Chongqing and Shenyang were the only mainland Chinese cities ranked in the top 20 list in terms of price rises, according to Knight Frank.