The 12 hottest housing markets in the world

In the absence of effective stimulus, global mainstream property prices are flagging, according to Knight Frank's latest global house price index.

The index rose just 1 percent year-over-year in the third quarter of 2012.  Price growth in Asia is slowing, and the 12 countries at the bottom of the list are all from Europe.

However, some housing markets are booming.

We drew on Knight Frank's list of 55 countries and highlighted the 12 with the highest price increases.

Estonia

Q3 2011 – Q3 2012:
6.4 percent

6-month change:
4.0 percent

3-month change:
2.6 percent

Estonia's home prices began to recover in the second half of 2010, but Europe's sovereign debt crisis continues to be a risk to the country's housing market.

Source: Knight Frank

India

Q3 2011 – Q3 2012:
6.5 percent

6-month change:
3.9 percent

3-month change:
0.6 percent

 "India is likely to see more polarization across city’s performances going forward as the economy absorbs some of the significant reforms that have been implemented over the last few weeks," according to Knight Frank's Nicholas Holt.

Source: Knight Frank

Iceland

Q3 2011 – Q3 2012:
6.6 percent

6-month change:
3.8 percent

3-month change:
0.7 percent

Some fear a housing bubble in Iceland as home prices are 1.7 percent below the pre-crisis peak inMarch 2008, according to Bloomberg. The rise in prices has been attributed to currency controls put in place to support the currency after the country's biggest banks collapsed.

Source: Knight Frank

Norway

Q3 2011 – Q3 2012:
7.0 percent

6-month change:
3.8 percent

3-month change:
0.6 percent

Many are also wary of a housing bubble in Norway. Recently prime minister Jens Stoltenberg said that there is a housing shortage and home prices could rise beyond current record levels, according to Reuters.

Source: Knight Frank

Malaysia

Q3 2011 – Q3 2012:
7.3 percent

6-month change:
1.3 percent

3-month change:
-1.8 percent

In an October report, Knight Frank's Nicholas Holt wrote, "In Malaysia, with the implementation of further cooling measures, we expect the market that has recently plateaued to remain steady through 2012 although the exit of some speculators from the market could put some downward pressure on prices and sales rates moving forward."

Source: Knight Frank

China

Q3 2011 – Q3 2012:
7.7 percent

6-month change:
12.8 percent

3-month change:
4.6 percent

China has no intentions of lifting curbs on its property market. Shanghai and Beijing saw a 7.1 percent year-over-year decline in prices at the end of the second quarter, though prices in the affordable housing sector have continued to rise showing "real end user demand", according to Knight Frank's Nicholas Holt. 

"The Chinese market shows uneven performance and no signs of lifting the cooling measures."

Note: This data is based on Beijing and Shanghai

Source: Knight Frank

Austria

Q3 2011 – Q3 2012:
10.1 percent

6-month change:
0.2 percent

3-month change:
0.7 percent

Home prices have been rising the most in Vienna, but are up around Austria too. The market does however face risks from the European sovereign debt crisis.

Source: Knight Frank

Colombia

Q3 2011 – Q3 2012:
10.5 percent

6-month change:
5.7 percent

3-month change:
4.9 percent

People from Venezuela, the U.S., Mexico, and Chile are the most likely foreign buyers of Colombia's homes, according to the New York Times. Most tend to purchase because of a connection to the country, but there are also investment buyers from the U.S., UK, and Europe.

Source: Knight Frank

Russia

Q3 2011 – Q3 2012:
10.7 percent

6-month change:
5.6 percent

3-month change:
2.4 percent

Russia had a housing boom from 2000 – 2007 but saw prices begin to fall in late-2008 after the global financial crisis hit and pushed the country into a brief recession. Recently however home prices have been picking up again.

Source: Knight Frank

Turkey

Q3 2011 – Q3 2012:
11.5 percent

6-month change:
6.9 percent

3-month change:
3.5 percent

Turkey has been trying to lure foreign investors to its real estate market, as prices have become unaffordable for domestic buyers, according to the WSJ.

Source: Knight Frank

Hong Kong

Q3 2011 – Q3 2012:
14.2 percent

6-month change:
14.1 percent

3-month change:
4.5 percent

As Hong Kong's home prices have increased the government has enacted policies to cool the housing market including lending curbs and ten measures to increase housing supply, according to Knight Frank's Nicholas Holt.

Source: Knight Frank

Brazil

Q3 2011 – Q3 2012:
15.2 percent

6-month change:
6.3 percent

3-month change:
3.0 percent

Brazil's property market is said to be extremely overvalued and there are concerns of a bubble forming in its housing market. The upcoming Olympics and World Cup have brought the country attention but its economic growth has been disappointing.

While Brazil recorded the highest growth in home prices, the pace is slowing.

Source: Knight Frank

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