Further in Q3 2015
Japan’s house price rises continue to be spectacular, with the average price of existing condominiums in Tokyo rising by 8.97%, up from the meagre growth of 0.39% the previous year. Residential property prices rose by 1.98% q-o-q in Q3 2015.
The Philippines’ housing market remains strong. The average price of 3-bedroom condominium units in Makati CBD rose by 5.41% during the year to Q3 2015, compared to 3.58% during the year to Q3 2014. Housing prices increased 1.27% q-o-q during the latest quarter.
China’s housing market has made a strong comeback, with the price index of second-hand houses in Shanghai rising by 5.07% during the year to Q3 2015, in contrast to a y-o-y decline of 0.45% the previous year. During the latest quarter, house prices in Shanghai rose by 2.21%.
Thailand’s housing prices rose by 3.4% during the year to Q3 2015, a slight improvement from the annual growth of 2.15% the previous year. House prices increased 3.15% during the latest quarter.
South Korea’s nationwide housing purchase price index rose by 3.4% amidst low interest rates and relaxed mortgage lending rules, an improvement from the annual rise of 2.15% during the year to Q3 2014 and the biggest y-o-y rise in the past seven years. House prices increased by 0.72% q-o-q during the latest quarter.
Half of Asia continues to lose steam. House prices fell in four of the ten Asian markets for which figures were available in Q3 2015.
Singapore’s housing market continues to struggle, with house prices falling by 3.62%, its eighth consecutive quarter of house price falls. House prices fell by 1.06% q-o-q during the latest quarter.
Taiwan’s nationwide house prices dropped 2.95% during the year to Q3 2015, the second consecutive quarter of y-o-y price falls since Q2 2009, due to the government’s recent housing market cooling measures. This was in sharp contrast with the increase of 3.42% y-o-y to Q3 2014. House prices dropped 2.4% during Q3 2015.
Indonesia’s housing market remains weak, with residential prices in the 14 largest cities falling by 1.49%, the third consecutive quarter of y-o-y price falls since Q3 2012, and contrasting with the annual rise of 2.77% a year earlier. House prices fell by 0.67% during the latest quarter.
Vietnam’s housing market has been stabilising, with house prices falling by just 0.06% y-o-y to Q3 2015. House prices were unchanged during the latest quarter.
The U.S. housing market had healthy growth, with the S&P/Case-Shiller seasonally-adjusted national home price index rising by 4.96% during the year to endQ3 2015, after a rise of 3.02% during the year to Q3 2014. Also stronger was the Federal Housing Finance Agency’s seasonallyadjusted purchase-only U.S. house price index, which rose by 5.6% y-o-y in Q3 2015, up from an annual increase of 2.95% in Q3 2014. Both indices were adjusted for inflation, as are other figures used in this survey.
Canada’s housing market remains robust, despite repeated market cooling measures.
House prices in the country’s eleven major cities rose by 4.57% during the year to Q3 2015, up from a y-o-y rise of 3.31% during the same period last year, and the biggest annual increase since Q3 2010. During the latest quarter, house prices increased 2.89% q-o-q.
Both the world’s strongest (Qatar) and weakest (Dubai) housing markets in the survey are from the Middle East.
Qatar’s property market is booming, supported by rapid economic and population growth, and a construction boom in preparation for the 2022 FIFA World Cup. The nationwide real estate price index skyrocketed by 16.42% during the year to Q3 2015, after a rise of 37.2% y-o-y to Q3 2014. Property prices rose by 4.23% q-o-q during the latest quarter.
In contrast, Dubai remains the world’s weakest housing market. Residential property prices plunged by 14.1%, the third consecutive quarter of house price falls, and the biggest y-o-y drop since Q1 2011. House prices dropped 3.79% during the latest quarter.
Dubai’s property market has been one of the world’s most volatile. Dubai saw one of the world’s worst housing crashes with house prices plunging by 53% from Q3 2008 to Q3 2011. The housing market started to recover in 2012, recording double-digit house price increases from Q2 2012 to Q4 2014. The property market started to show weakness in the second half of 2014, amidst housing oversupply, subdued demand and slower economic activity.
Despite this, demand is rising. The total number of apartment transactions in Dubai rose by 6.6% y-o-y in the first nine months of 2015, according to Cluttons. About 20,170 dwelling units are expected to be delivered this year, almost double the annual average of 11,600 units in the past three years, according to REIDIN.
House prices in Dubai are expected to fall further amidst tighter government regulations, rising inflation, and a strong dirham, according to Jones Lang La Salle. This was supported by global credit rating agency Moody’s, which predicted that Dubai property prices are likely to fall by 10%-15% this year. However, Moody’s sees the house price correction as a sign of maturity in the market, with no repeat of the great housing crash seen in 2009.
The UAE’s economy is projected to expand by only 3% this year, due to falling oil prices, after GDP growth of 4.6% in 2014, 4.3% in 2013, 7.2% in 2012 and 4.9% in 2011, according to the IMF. Dubai, which has a more diversified and less oil dependent economy, is expected to grow by about 5% this year.
Israel’s housing market is slowing again, with the nationwide average price of owneroccupied dwellings rising by just 2.33% during the year to Q3 2015, after annual increases of 5.94% in Q3 2014. House prices fell 3.15% q-o-q in Q3 2015.
Property demand continues to surge in Israel. New dwelling sales soared by 66% y-oy in Q3 2015, to 8,467 units, according to the Central Bureau of Statistics (CBS). The number of new dwellings for sale increased slightly by 1.6% to 27,333 units.
Israel’s economy is expected to grow by 2.5% this year. Economic growth stood at 2.6% last year, its slowest pace in five years, mainly due to the July-August conflict with Palestinian militants in Gaza, according to the Bank of Israel. The Bank of Israel kept its benchmark interest rate at a record low of 0.1 in December 2015, after cutting it by 15 basis points in February 2015.
Egypt’s nationwide real estate index plunged by 12.48% during the year to Q3 2015, the biggest y-o-y decline since Q3 2013. However, house prices increased slightly by 0.35% q-o-q in Q3 2015.
In an effort to buoy the property market, President Abdel Fattah el-Sisi recently ratified Law 17/2015, removing the last remaining restrictions on foreign ownership of land and property in Egypt, and introduced rules allowing the government, the biggest landowner in Egypt, to contribute land to the private sector as part of public-private partnership schemes against a share of the revenue.
Egypt’s economy is expected to expand by 4.2% this year, up from 2.2% in 2014, 2.1% in 2013, 2.2% in 2012, and 1.8% in 2011, on the back of a more stable political environment, large donations from Gulf Cooperation Council (GCC) allies and improving business sentiment, according to the IMF.
New Zealand saw spectacular growth, with the nationwide median house prices surging by 14.86% during the year to Q3 2015, after annual rises 3.93% to Q3 2014. House prices soared by 7.1% q-o-q during Q3 2015.
South Africa’s housing market remains weak, with the price index for medium-sized apartments falling slightly by 0.19% during the year to Q3 2015, in contrast with a y-o-y increase of 2.89% during the same period last year. House prices increased 0.69% q-o-q in Q3 2015.
Latin America is mixed. Brazil’s housing market continues to fall, amidst a worsening economic and political situation. In Sao Paulo, house prices fell by 5.54% during the year to Q3 2015, the second consecutive quarter of y-o-y price falls and in contrast to the annual rise of 3.29% a year ago. Quarteron-quarter, house prices dropped 1.11% in Q3 2015.
Mexico’s housing market is rising, buoyed by strong demand in resort communities. The nationwide house price index rose by 5.45% during the year to Q3 2015, up from an annual increase of 0.01% during the year to Q3 2014. House prices rose 2.98% during the latest quarter.