Photo: Rob Holland/Flickr
On a global scale, home prices are rising at their slowest rate since 2015. But, in the first quarter of 2018, the City of Vancouver continued to outperform all Canadian markets, and many international markets, with the fourth largest annual price growth out of 150 cities worldwide.
During the first three months of the year, the average residential home price in Vancouver saw a 15.4 per cent increase from the first quarter of 2017, according to Knight Frank’s Global Residential Cities Index, published this month.
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“In Vancouver, the mainstream and prime markets are diverging with prices registering 15.4% and 0.2% respectively on an annual basis” says Kate Everett-Allen, International Residential Researcher at Knight Frank, in a press release.
The real estate consulting group’s index tracks the movement in average residential prices across the globe, including ten Canadian cities.
The Indian city of Surat ranked first on the list, as prices there rose 22.3 per cent in Q1 2018, compared to the first quarter of 2017. Izmir, Turkey and Hong Kong, China took second and third place.
As for Vancouver’s big divide between conventional and luxury housing, Everett-Allen says the city’s prime residential market has been more heavily hit by macroprudential measures.
“The foreign buyer tax affected the higher end of the market (above $3 million) the most, although this market segment was already in decline when the tax measure came into place in 2016 (and the tax was subsequently increased to 20 per cent in February this year),” writes Everett-Allen in an email statement to Livabl.
“It is the lower end of the market where the highest competition for homes are creating the greatest pressure on prices,” she adds.
Knight Frank notes that divergent markets are also evident on a national scale. The report outlines the top 10 global countries with the largest gap between their strongest and weakest performing cities, based on annual price growth.
Canada ranked third on the list with a 15.8 per cent gap in residential home price growth between Quebec City and Vancouver.
In the first quarter of 2018, Quebec City saw a 0.4 per cent decline in home prices, compared to the same period a year ago. However, Everett-Allen says market conditions are improving in the province’s capital.
“Average prices in Quebec [City] hit their peak in November 2017 before moderating in the first quarter, and the latest data shows a slight uptick in the second quarter. Improving economic indicators — lower unemployment and rising average incomes — are boosting consumer sentiment and transactional activity.”
India ranked first with a 27.1 per cent gap between its strongest and weakest performing cities of Delhi and Surat in Q1 2018. Australia came in second place with a 20.6 per cent gap between the cities of Darwin and Hobart.