Fur­ther in Q3 2015

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

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