The world’s best and worst housing markets

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The secret’s finally out about the best performing international house markets for property investors over the past decade – and the results are not what most property people would think.

Top of the league is India, where prices have surged by 284% since 2001 – an average annual increase of 14%.

The UK returned a 50% increase over the same period – an average annual price raise of 5% and almost six times less than India over the decade.

Behind India comes Russia (209%), with South Africa snatching third place (161%).

The report, by Lloyds TSB International, shows that house prices tracked across 32 countries jumped by an average 56% across the decade, after stripping out inflation.

The countries with the fastest growing economies also returned the highest house price increases.

GDP has increased on average 155% in the 10 countries with the biggest rises in house prices – quadruple the average 43% rise in GDP in the 10 countries with the worst house price performance.

Three of the countries with the largest house price declines – Japan, Germany and the USA – were also members of the exclusive G8 club of countries with the largest economies.

Japan recorded the biggest fall in house prices (-30%), followed by Ireland (-23%) and Germany (-17%).

The UK returned a mid-table 13th place – but India, Russia, South Africa, Lithuania, Hong Kong and Bulgaria showed at least double the increase.

The eurozone saw an average 23% increase – with France (82%), Belgium (69%), Finland (61%), Spain (46%) and Italy (31%) pulling the average up while Ireland (-23%), Germany (-17%) and Portugal (-11%) dragged the figure down.

Suren Thiru, economist at Lloyds TSB International, said: “Overall, house price growth during the past decade was stronger in countries with the fastest growing economies.

“A house price divide appears to be opening up with the general outperformance of the housing market in emerging economies compared to more developed nations appearing to reflect the stronger economic performance of these countries.”

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