House prices around the world rose by 2.4 percent in Q2 2013 with European property prices rising for the first time since 2010, according to Knight Frank’s Global House Price Index.
The report reveals that Dubai leads the annual rankings, recording price growth of 21.7 percent in the year to the end of June.
Prices rose in 37 of the 55 countries tracked by the index in the second quarter of 2013 (two years ago, prices rose in 27 countries).
The report reveals that Dubai leads the annual rankings, recording price growth of 21.7 percent in the year to the end of June.
Furthermore, it would appear, the Emirate’s housing market has gained momentum since late 2012, while its prime market led the way, mainstream prices are now following suit, explains Kate Everett-Allen, Knight Frank international residential research.
Click here to read about the property market in the United Arab Emirates.
She explains that for the first time since 2010, European countries recorded positive annual price growth with Turkey being the strongest performer (up by 12.2 percent) and Greece the weakest (down by 11.5 percent) year-on-year (y/y).
Mainstream prices in Greece, Spain and Italy are now 31 percent, 29 percent and 15 percent below their respective market peaks, according to official data.
“The economies of some key emerging markets are showing signs of strain and this is being reflected in their housing markets’ performance.”
Annual price growth in Brazil stands at 11.9 percent down from 18.4 percent a year earlier.
Meanwhile, in the US, nationally, prices rose by 10.2 percent in the last 12 months, with Atlanta and Chicago recording the strongest growth in Q2 2013.
According to the ooba August results, there is sustained growth in the residential property market with the originator’s average purchase price showing a y/y price growth of 8.3 percent to R905 200, while the first-time buyers’ purchase price recorded 4 percent y/y increase to R686 176.
Quarterly growth was 7.1 percent in the US compared to 0 percent in China and for the fourth consecutive quarter the bottom 10 rankings have all been occupied by European countries, she says.
While Greece, Spain and Portugal dominate the headlines, The Netherlands, Hungary and Croatia recorded price falls of 8.5 percent, 8.2 percent and 5.5 percent respectively in the year to June.
According to the report, tight lending conditions, high levels of consumer debt and rising unemployment are depressing market activity.
The UK, after three years of negative price growth in its mainstream market saw a price rise of 2.6 percent.
According to the report, the medium term outlook is muted, Europe has been the main drag on the global housing market’s performance in recent years but growing confidence is being tempered by deterioration in the outlook for a number of the large emerging market economies.
According to the ooba August results, there is sustained growth in the residential property market with the originator’s average purchase price showing a y/y price growth of 8.3 percent to R905 200, while the first-time buyers’ purchase price recorded 4 percent y/y increase to R686 176.
Rhys Dyer, ooba chief executive officer, notes that ooba statistics continue to show consistent house price growth for 2013, reflecting the positive residential demand growth and better market fundamentals that prevail.
House prices around the world rose by 2.4 percent in Q2 2013 with European property prices rising for the first time since 2010, according to Knight Frank’s Global House Price Index.
The FNB House Price Index for September reveals a mild price growth of 6.6 percent from 6.3 percent in August with the average value of homes transacted recording R900 907.
In real terms adjusting house prices for general inflation in the economy using the Consumer Price Index (CPI), as at August there was virtually no y/y change, with only a very slight -0.11 percent decline to be precise, with the CPI recording inflation of 6.4 percent in that month from 6.3 percent in July.
Evaluating longer term performance, compared to September 2003, the index is up 35.5 percent in real terms and 137.5 percent in nominal terms and in real terms, the index is -20.2 percent down on last decade’s revised real price peak reached in December 2007, while in nominal terms it is a mere 14.7 percent higher, thus reflecting a partial price “correction” following the boom years.
The report notes that residential demand has been improving, but the FNB estimates of house price growth in recent months point to no significant change in real house price levels, as nominal house price inflation more-or-less tracks consumer price inflation.
Meanwhile, the Standard Bank House Price Index shows growth of 6.9 percent y/y from 7.6 percent y/y in August.
The report also reveals that data from the National Credit Regulator shows that mortgage obligations continue to largely be paid on time, with 90.99 percent of the rand value of outstanding mortgage debt (89.90 percent of the number of outstanding mortgage loans) classified as “current” as of Q2 13.
According to the bank, this bodes well for the overall structure of the housing market, and it appears that in the near term, the housing market is unlikely to see an influx of properties stemming from foreclosures. – Denise Mhlanga
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