Asia Leads Rebound In Global Housing Markets

The tidal wave of money from collective reflationary policies appears to be lifting global property prices. Although the impact has so far been variable.

This from Global Property Guide,

``Housing markets in the world’s leading economies continue to recover, says the Global Property Guide's summary of housing statistics for the year to end-Q3, 2009.


``Many housing markets in leading economies remain distressed. Of the 27 countries which have already published their Q3 data, more countries have experienced house price falls (17 countries) during the year to date, than have enjoyed price rises (10). In addition, the house price falls in several countries have been much larger than house price rises anywhere, and include unprecedentedly severe falls in Latvia (-59.7% year to date), the UAE (-48.1%), Bulgaria (-28.7%), Iceland (-21.2%), Russia (-19.5%) and Slovakia (-15.3%) (all figures inflation-adjusted).

``However the annual data is somewhat like a car’s rearview mirror. During the latest quarter, price rises have occurred in 16 countries, and falls in only 11, of the 27 countries (both major US indices were nominally positive, but adjusting for inflation puts the FHFA index still in negative territory). Quarter-on-quarter house price changes in the UK, Canada, Germany, Singapore, and South Africa are back in positive territory, after these countries suffered during the global financial crisis.

``So the trend is toward recovery. More broadly, the world seems polarized between the Asian economies, which are enjoying strong economic growth and high residential property price rises (Thailand excepted), and Eastern Europe and the UAE, where growth has stalled and property markets have crashed. Even there, figures for the latest quarter offer hope." (bold emphasis mine)

Read the rest of the article here

So again we can observe that Asia has been outperforming developing economies in terms of housing prices (which is another sign of decoupling) and possibly could be indications of a property bubble in motion.

Global Property Prices: Still Depressed

The Economist.com recently published market indicators of global property prices. Their conclusion: global property prices remain depressed.

Based on global housing prices, according to the Economist (bold highlight mine),

``WHEN we last looked at global house prices, only six of the countries we surveyed had recorded year-on-year declines. Three months later that figure has risen to 16. In America some saw signs of a bottom in a report on March 17th showing sharp rises in housebuilding starts and permits in February, after months of decline. Others, however, just saw a bigger stack of apartments for sale which no one will be very keen to buy. Fear has now replaced frenzy, and house prices may overshoot on the way down. A recent report by Numis Securities estimated that British house prices could fall by a further 40-55%, saddling millions with properties worth less than their mortgage debt. Long was the uphill march, long will be the downhill descent."

Based on office rents, again from the Economist, ``Office rents in London, measured in dollars, fell by 41% in the year to the fourth quarter of 2008, according to CB Richard Ellis, a property firm. Around half of that drop reflects lower local charges for office space. The rest was down to a fall in sterling against the dollar. Almost all of Sydney’s 25% decline in rents was because of a weaker Australian dollar. Rents in other rich cities, such as Frankfurt, New York and Paris, dropped by less. These places are already cheaper than Moscow. The rise in Tokyo rents makes it the most expensive city in the survey. All and more of the rise in charges was because of the yen’s appreciation. Rents in Beijing were barely changed in yuan, but cost 8% more than a year earlier in dollars."(bold emphasis mine)