Durban has beaten Cape Town and Johannesburg to gain the best position among South African cities on the latest Knight Frank Global Residential Cities Index.
The index takes property consultancy Knight Frank’s Global House Price Index one step further by tracking mainstream residential prices on a city rather than country basis. The new index is based on official house price data for mainstream residential markets and covers 165 of the world’s key urban residential markets.
Durban is the top performing South African city on the index, taking 14th place out of the 165 cities in the world surveyed. Residential property prices in Durban increased on average by 11.6% between the fourth quarter of 2014 and the fourth quarter of 2015.
Cape Town did second best among the South African cities included on the index. The Mother City holds the 33rd position with an average residential property price increase of 8.6%. Johannesburg is the third SA city to make it on the index. It is in 52nd spot with an average price increase of 6%.
Overall, the Global Residential Cities Index increased by 4.4% in 2015. More than 121 of the 165 cities tracked by the index saw house prices either rise or remain flat in 2015.
The Chinese city of Shenzhen tops the index with price growth of 47.5% recorded in 2015. More than 22 percentage points separates Shenzhen from the index’s second ranking city, Auckland, which saw prices grow on average by 25.4%. Istanbul (25%), Sydney (19.9) and Shanghai (18.2%) complete the top 5 cities.
The bottom five performers were Trieste (-5%), Genoa (-5.1%), Nicosia (-5.2%), Thessaloniki (-5.9%) and Chandigarh (-7.7%).
Twenty US cities made the list. Portland (11.4%) did the best followed by San Francisco (10.4%). Washington DC (1.7%) saw the weakest growth among the US cities listed. Vancouver is, however, the best performing city in North America with average price growth of 11.9% on an annual basis.
House price growth by world region shows the Middle East tops with growth of 12.4%, followed by Africa (8.8%), Australasia (6.7%), North America (5.4%), Asia Pacific (3.7%), Latin America (3.2%), Europe (2.9%) and Russia (0.1%). Of the 43 cities which saw house prices decline in 2015, 20 were located in Europe, especially in southern Europe.
According to Kate Everett-Allen, international residential analyst at Knight Frank, urban and rural housing markets are increasingly polarised when it comes to price performance. She said, according to the World Bank, 54% of the world’s population currently lives in cities, and by 2045 the urban population will rise by another 2 billion to 6 billion, suggesting the pressure on urban prices looks set to intensify.