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Dubai property tops world again

Dubai property tops world again

Dec 2012

Dubai has seen the biggest property price rises in the world over the last 12 months.

Dubai previously topped global property indexes, until the global economic downturn took its toll, but after three years of decline it is now back on top.

When allowing for inflation, prices rose 13.46% year-on-year in Dubai in year to quarter three of 2012 .

Next came Brazil, with a 12.46% annual rise and 2.91% quarterly rise, after inflation. The country’s economy is expected to be further boosted the hosting of the 2014 Football World Cup and the 2016 Olympics.

Hong Kong was third, recording a 10.76% increase and Austria fourth, up 7.53% on the year, allowing for inflation.

The American property market has continued to recover in the year to quarter three of 2012, says the Global Property Guide index.

But many markets across Europe have struggled during the year and are under severe pressure.

Without allowing for inflation, Brazil performed best, up 18.35% year-on-year, followed by India at 15.58% and Turkey came third, with a 14.45% jump.

Of the 44 countries for which quarterly inflation-adjusted house price figures are available, house prices fell in just over half – 23 of them during the year to quarter three in 2012. Without taking inflation into account, 25 housing markets declined and 19 improved.

Alan Robertson, CEO of Jones Lang LaSalle Mena, says, “We are definitely seeing a return in confidence to the Dubai real estate market. This is still Dubai and it’s as ambitious as ever but we are also seeing a more mature and considered approach which is only going to benefit the long term health and credibility of the real estate sector amongst domestic and international investors and stakeholders.”

In America, the signs look good. The Federal Housing Finance Agency (FHFA) seasonally-adjusted purchase-only house price index rose by 2.31% in the 12 months to quarter three 2012, the highest growth seen since spring 2006. The nationwide seasonally-adjusted S&P/Case-Shiller home price index also rose by 1.92% during the same period, in contrast to its previous 7% year-on-year decline.

The total of new housing starts in America soared by 34.8% year-on-year, the strongest rise since July 2008 and in October 2012 builder sentiment was at its highest since May 2006, according to the National Association of Home Builders.

Sales of previously occupied homes are near five-year highs, rising by 2.1% in October 2012 from a year ago, according to data from the National Association of Realtors.
The housing market in neighbour Canada is slowing after the government imposed stricter mortgage rules. House prices in its eleven major cities still rose 2.92% year-on year, according to the global index.

Canadian house prices surged 62% from 2000-2008 and rose another 18% from 2009-2012, despite several housing market cooling measures from the government.  “The housing market has softened somewhat in part because of steps that I’ve taken and I’m happy about that,” says Canada’s finance minister Jim Flaherty.

Pacific housing markets are also recovering. New Zealand’s median house price rose by 5.19% during the year, against a 4.39% decline last year and they are expected to continue rising, mainly fuelled by the rebuilding of Canterbury. Prices in Australia fell 1.57% year-on-year, the lowest decline for almost two years.

In Europe, there were significant house prices rises in Austria, Turkey, Latvia, Germany, Iceland and Finland. But in Greece, Spain, Netherlands, Portugal, Croatia and Lithuania price falls worsened.

Altogether, 14 European countries recorded house price falls while nine saw increases and the weakest nine countries in the Global Property Guide are all in Europe.
Ireland remains the world’s weakest housing market in quarter three of 2012, but the decline is slowing. House prices dropped 13.17% in the last year, the smallest decline for almost two years.

Greece is close behind, with house prices plunging 12.47% during the year, the steepest annual decline since 1998. Greece now in its fifth year of recession with real Gross Domestic Product expected to fall 6% this year.

House price declines in Spain are also accelerating, as the economy sinks deeper into recession. House prices fell 11.87% during the year to quarter three, the biggest decline in the last decade.

The Spanish economy is expected to contract by 1.3% this year and by another 1.4% in 2013. The country’s deficit is projected to remain high, at 8.1% of GDP by end-2012, the index points out.

Property prices in The Netherlands fell 11.43% year-on-year, the biggest decline for three years and prices in Romania also suffered, falling 12.76% annually.

Other European countries that suffered include Portugal, down 9.7% year-on-year, Zagreb, Croatia (-8.03%), Warsaw, Poland (-7.64%), Bulgaria (-6.84%), Ukraine (-4.41%), Vilnius, Lithuania (-4.36%), Slovakia (-4.13%), Russia (-3.98%), UK (-3.97%), and Sweden (-3.17%).

But there was good news in Norway, where prices rose by 6.55% year-on-year, and by 1.27% in the latest quarter.

There were annual rises in Turkey (4.96%), Riga, Latvia (3.38%), Switzerland (3.27%), Germany (3.16%), Estonia (2.62%), Iceland (2.28%) and Finland (0.52%).

The Asian housing market surge has weakened. Seven of the 10 Asian housing markets performed more poorly this year than last. But its biggest housing market, China, slowed its decline from -4.16% last year to -2.34% this, after inflation.

In Hong Kong, house prices surged by 10.76% year-on-year, a little down on last year’s 12.92% rise. During the latest quarter, Hong Kong’s house prices were up 6.69%.

Prices in the Philippines rose 4.63% year-on-year, significantly up on the 0.64% growth during the same period last year. Its economy is expected to grow 4.80% this year.

Malaysian house prices rose 5.86% during the year and in Greater Taipei, Taiwan, the Lutheran house price index rose 2.32% year-on-year against a 7.65% annual rise to quarter three in 2011, according to Sinyi Real Estate Planning and Research.

In the Indian capital, New Delhi, house prices rose 5.31% year on year, much lower than the 22.68% year-on-year rise seen in the same period last year.

In Singapore, house prices fell 2.88% following government market-cooling measures they also dropped -0.34% in the latest quarter, the fifth consecutive decline.

There were also year-on-year house price falls in Shanghai, China (-2.34%), Tokyo, Japan (-1.94%), Thailand (-0.83%), and Indonesia (-0.23%).

Prices in Israel grew 0.79% year-on-year, following three consecutive quarters of declines, according to Israel’s Central Bureau of Statistics.

In South Africa the price index for medium-sized houses rose 2.02% for quarter three in 2012, the fastest quarterly increase for two years, fuelled partly by lower interest rates. But year-on-year, house prices fell 2.47%. A housing market recovery looks doubtful against a slowing economy and domestic social unrest.

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