First published 28/03/2012

Looking for 10-year capital growth of 200%-plus? Recently released data suggests that it’s time to move to India or Russia. But before you pack your bags, it’s worth noting that Australia also makes the top ten – and it’s recent performance outshines some of its higher ranked counterparts.

According to the Lloyds TSB International Global Housing Market Review, the world’s emerging economies have led the way for house price growth – taking out four of the top six spots for 10-year price growth.

The report calculated what it called “real house price changes” – i.e. growth after allowing for consumer price inflation – between the third quarter of 2001 and the third quarter of 2011, and placed India at the top of the list with a phenomenal figure of 284%.

Russia (209%) and South Africa (161%) rounded out the top three, with Australia’s figure of 76% putting it in ninth place.

Australia outpaced Russia over the past year however, recording a -5.7% decline to Russia’s -24.3% crash, as well as sixth placed Bulgaria (-10%).

Perhaps unsurprisingly, the countries with the fastest growing economies were found to have seen the largest house price rises. The report notes that Indian GDP, for example, rose by 280% during the 10-year period in question, while the average GDP rise for the top 10 countries in the list was 155%.

Meanwhile, some of the world’s largest economies saw their house markets crash over the last decade. The report notes that half of the six countries that recorded a fall in house prices over the past decade – Japan, Germany and United States – are members of the G8. Japan was the biggest loser (-30%), followed by Ireland (-23%) and Germany (-17%).

“Overall, house price growth during the past decade has generally been stronger in the 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,” said  Lloyds TSB International economist Suren Thiru.

“Looking forward, the outlook for house prices globally is likely to be determined in part by the pace at which the global economic recovery continues, the events in the Eurozone as well as the economic prospects of individual countries.”

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