Seoul and Tokyo Top List of Fastest Growing Housing Markets

Seoul and Tokyo have topped the list of the fastest growing prime housing markets in the world.

The South Korean capital came out on top with home prices having increased 25.2 percent, while the Japanese capital has seen a 16.3 percent jump in home prices, PropertyWire reported, citing data from Knight Frank. Dubai, meanwhile, came in third with a 15.8 percent surge in house prices.

Seoul, Tokyo and Dubai also have seen the biggest increase over a five-year period, according to Knight Frank data. Tokyo saw the largest with 120 percent, while Dubai saw a 107 percent increase and Seoul experienced an 81 percent rise.

In Seoul, low interest rates have helped make mortgages more affordable for interested buyers. A weakened yen in Japan has made it easier for investors in Tokyo to get their foot in the door. And in Dubai, international investors have swamped the market with cash and an eagerness to buy.

It comes as the United States experiences “a more complex economic outlook,” which “has added another layer of uncertainty,” Liam Bailey, Knight Frank’s global head of research, told PropertyWire.

At the same time, the summer heat could begin to dissipate soon.

“Strong underlying fundamentals, such as wealth creation and supply constraints in prime districts, will support prices, but a significant acceleration in the market is unlikely in the second half of the year,” Bailey said. “Prime markets are taking a collective breath. The recovery we have seen over recent quarters was aided by the expectation of lower borrowing costs, and with that timeline now pushed out, a cooling in price growth is inevitable.”

London is seeing a year-over-year home price reduction of 2.5 percent and Toronto has seen a 6.7 percent drop. Home prices in Hong Kong have fallen 14.3 percent, while Guangzhou in mainland China saw an 8.9 percent decrease.

Of the global markets across 46 cities examined by Knight Frank, 75 percent of them saw positive house price growth over the past year at an average rate of 2.3 percent.

— Chris Malone Méndez