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Investment Analysis

Q3 2015: Global house price boom accelerates further, led by Europe, North America, and some parts of Asia Pacific

by GLOBAL PROPERTY GUIDE

Dec 21, 2015


The world's housing markets continue to surge, and the boom now includes most of Europe, North America, and some parts of Asia. The five strongest housing markets in our global survey are Qatar (+16.42%), New Zealand (+14.86%), Hong Kong (+12.64%), and two European countries: Sweden (+11.26%) and Iceland (+9.24%).

The biggest y-o-y house-price declines were in UAE (-14.1%), Russia (-13.38%), and Egypt (-12.48%).

During the year to Q3 2015, house prices rose in 28 of the 41 world's housing markets which have so far published housing statistics, using inflation-adjusted figures. The more upbeat nominal figures, more familiar to the public, showed house price rises in 30 countries, and declines in 11 countries.

Momentum.  In Q3 2015, 22 housing markets showed stronger upward momentum, while 19 housing markets showed weaker momentum. Momentum is a measure of the "change in the change"; simply put, momentum has increased if a property market has risen faster this year than last (or fallen less).

Inflation-adjusted figures are used throughout this survey, which covers the period till end of third quarter of 2015. In the case of Kiev, Ukraine, the Global Property Guide adjusts using the official U.S. inflation rate since Ukrainian secondary market dwelling sales are denominated in U.S. dollars.

Source: Various series, data descriptions and sources here

By Region:

  • Europe's house price boom continues.  Four of the ten strongest housing markets in our global survey are in Europe. Overall, 15 of the 20 European housing markets for which figures are available in Q3 2015 showed rising house prices compared to the same period in the previous year.
  • Sweden's housing market continues to soar, with house prices surging by 11.26% during the year to Q3 2015, the highest y-o-y rise since Q2 2006. This can be attributed to very low interest rates and a shortage of housing supply. House prices increased 3.83% q-o-q in Q3 2015.

    Ireland's residential property prices rose by 9.24% during the year to end-Q3 2015, down from y-o-y increases of 14.52% in Q3 2014. On a quarterly basis, Irish house prices increased 4.93% in Q3 2015.

    Romania's housing market also turned around strongly, despite the ongoing political crisis which led Prime Minister Victor Ponta to resign amidst corruption scandals. The average selling price of apartments rose by a record 7.57% during the year to Q3 2015, in sharp contrast with the decline of 1.41% during the year to Q3 2014. House prices increased 3.76% q-o-q in Q3 2015.

    Estonia saw the average price of dwellings in Tallinn rise by 6.26% during the year to Q3 2015, after y-o-y increases of 15.4% in Q3 2014. House prices in Tallinn increased 0.56% q-o-q in Q3 2015.

    Other strong European housing markets included Iceland, with house prices rising by 5.27% during the year to Q3 2015, Norway (4.04%), UK (3.64%), Netherlands (2.75%), and Lithuania (2.43%). All, except Norway, saw positive quarter-on-quarter growth rates during the latest quarter. Of these, only in Norway did housing prices rise more y-o-y to Q3 2015 than a year earlier.

    European housing markets with minimal house price rises included Latvia, with house prices rising by 1.95% during the year to Q3 2015, Zagreb, Croatia (1.73%), Slovak Republic (1.43%), Cyprus (0.52%), Spain (0.49%), and Portugal (0.03%). All saw positive quarterly growth during the latest quarter.

  • Europe's weakest housing markets. Russia remains the second weakest housing market in our global survey and experienced Europe's biggest annual house price decline. Residential property prices plunged 13.38% y-o-y to Q3 2015, worse than last year's decline of 5.68% during the year to Q3 2014. House prices dropped 3.26% during the latest quarter.
  • In Ukraine's Kiev, the average prices of new residential properties fell by 5.5% during the year to Q3 2015, a sharp improvement from the decline of 36.12% y-o-y to Q3 2014. Quarter-on-quarter, house prices fell slightly, by 0.61% in Q3 2015.

    Other weak European housing markets included Greece, with house prices falling by 4.35% during the year to Q3 2015, Macedonia (-4.02%) and Finland (-0.20%). Both Greece and Finland performed better y-o-y to Q3 2015 than the previous year.

  • Most of Asia saw strong house price rises. House prices rose during the year to Q3 2015 in six out of ten Asian housing markets for which figures are available, and seven showed an improved performance on the previous year.
  • Hong Kong had the highest housing price rises in Asia and was the third strongest housing market in our global survey, with residential property prices surging by 12.64% during the year to Q3 2015, a sharp improvement from the 1.76% y-o-y increase during the previous year to Q3 2014. Housing prices rose by 1.12% q-o-q during the latest quarter.

    Japan's house price rises continue to be spectacular, with the average price of existing condominiums in Tokyo rising by 8.97% during the year to Q3 2015, 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% during the year to Q3 2015, 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 7 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% during the year to Q3 2015, its eight 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 country's 14 largest cities falling by 1.49% during the year to Q3 2015, 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 stabilizing, with house prices falling by just 0.06% y-o-y to Q3 2015. House prices were unchanged during the latest quarter.

  • North America's housing markets remain strong. 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 end-Q3 2015, after a rise of 3.02% during the year to Q3 2014. Also stronger was the Federal Housing Finance Agency's seasonally-adjusted 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 our global house price 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 in our survey. Dubai residential property prices plunged by 14.1% during the year to Q3 2015, 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.

    Israel's housing market is slowing again, with the nationwide average price of owner-occupied 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.

    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.

  • Pacific. New Zealand's housing market 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.
  • Africa. 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. Quarter-on-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.

Source: Various series, data descriptions and sources here

Europe's property markets in full-scale boom

Four of the ten strongest housing markets in our global survey are in Europe. Overall, house prices rose in 15 of the 20 European housing markets for which figures were available during the year to Q3 2015.

Sweden has had the highest housing price rises in Europe and is the fourth strongest housing market in our global survey, with house prices surging by 11.26% during the year to Q3 2015, the highest y-o-y rise since Q2 2006. This can be attributed to very low interest rates and a shortage of housing supply. House prices increased 3.83% q-o-q in Q3 2015.

During Sweden's housing boom from 2000 to Q2 2008, house prices skyrocketed by 71%, inflation-adjusted. After a short-lived decline from Q3 2008 to Q1 2009 due to the global financial meltdown, residential property prices started to rise again in Q2 2009. There was a dip from Q4 2011 to Q3 2012 amidst a sharp slowdown in economic growth, but house price growth resumed in Q4 2012 and price rises have been continuous since then. The Swedish economy is expected to grow by a modest 2.75% this year, up from growth rates of 2.3% in 2014, 1.3% in 2013, a decline of 0.3% in 2012, and growth of 2.7% in 2011, according to the IMF.

Ireland's house prices continue to rise, albeit at a slower pace, with residential property prices up by 9.24% during the year to end-Q3 2015, after y-o-y increases of 10.81% in Q2 2015, 17.57% in Q1 2015, 16.62% in Q4 2014, and 14.52% in Q3 2014. On a quarterly basis, Irish house prices increased 4.93% in Q3 2015.

The Irish economy is now the fastest-growing economy in the EU, with GDP growth of 5.2% last year, after lacklustre growth of 1.4% in 2013, 0.15% in 2012, 2.6% in 2011, and 0.4% in 2010. The Irish economy is expected to grow by a healthy 4.8% this year. Ireland is considered by some to be Europe's austerity star performer, having introduced structural reforms early in the crisis and it is, according to this narrative, now reaping the benefits.

Romania's housing market has turned around strongly, despite the ongoing political crisis which forced Prime Minister Victor Ponta to resign amidst corruption scandals. The average selling price of apartments rose by a record 7.57% during the year to Q3 2015, in sharp contrast with an annual decline of 1.41% in Q3 2014. House prices increased 3.76% q-o-q in Q3 2015.

Demand is rising fast. The value of real estate transactions almost quadrupled in 2014 to €1.2 billion from the previous year, according to PwC Romania. Residential construction activity is also recovering, with residential building permits rising by 5.2% during the first three quarters of 2015 from the same period last year, according to the  National Institute of Statistics (NIS). The Romanian economy is expected to grow by 3.4% this year and by 3.9% in 2016, after GDP growth of 2.8% last year, 3.4% in 2013, and o.6% in 2012, according to the IMF.

Though Estonia remains one of Europe's strongest housing markets, house price increases during the year to Q3 2015 were considerably lower than the double-digit rises seen in previous quarters, with the property market in Estonia's capital city Tallinn slowing sharply. In Tallinn the average price of dwellings rose by 6.26% during the year to Q3 2015, down from y-o-y increases of 9% in Q2 2015, 9.6% in Q1 2015, 12.6% in Q4 2014, and 15.4% in Q3 2014. House prices in Tallinn increased 0.56% q-o-q in Q3 2015.

The number of purchase-sale contracts of real estate increased by 6.8% to 11,525 units during the year to Q3 2015, while the value of real estate transactions surged 15.7% over the same period, according to Statistics Estonia. Economic growth stood at 0.5% y-o-y in Q3 2015, down from growth rates of 1.9% in Q2 2015 and 1.1% in Q1 2015. Estonia's economy is expected to grow by a modest 2% this year, after growth rates of 2.9% in 2014, 1.6% in 2013, 5.2% in 2012, 7.6% in 2011, and 2.5% in 2010, according to the IMF.

Other strong European housing markets included Iceland, with house prices rising by 5.27% during the year to Q3 2015, Norway (4.04%), UK (3.64%), Netherlands (2.75%), and Lithuania (2.43%). All, except Norway, saw positive quarter-on-quarter growth rates during the latest quarter. Despite this, only Norway performed better during the year to Q3 2015 compared to a year earlier.

European housing markets with minimal house price rises included Latvia, with house prices rising by 1.95% during the year to Q3 2015, Zagreb, Croatia (1.73%), Slovak Republic (1.43%), Cyprus (0.52%), Spain (0.49%), and Portugal (0.03%). All saw positive quarterly growth during the latest quarter. In addition, all, except Latvia and Portugal, performed better than the previous year.

Several European housing markets remain weak

Russia remains the second weakest housing market in our global survey and saw the biggest annual house price decline in Europe. Residential property prices plunged 13.38% y-o-y to Q3 2015, worse than last year's y-o-y decline of 5.68% to Q3 2014 and the biggest annual drop since Q4 2011. House prices fell by 3.26% during the latest quarter.

The substantial difference between the nominal y-o-y decline in Russian house prices (-5.68%) and the real decline (-13.38%) was mainly due to Russia's very high inflation rate. Russia's housing market continues to suffer from the country's financial crisis, ultimately unleashed by the Ukraine conflict and by falling oil prices. Russia's currency has collapsed, and interest rates are high.

Russia's economy has entered its first recession since the 2009 financial crisis, with GDP contracting by 4.1% in Q3 2015 after declines of 4.6% and 2.2% the previous two quarters, according to the Federal State Statistics Service (Rosstat).  Overall, the economy is projected to contract by 3.8% this year, after growth of 0.6% in 2014, 1.3% in 2013, 3.4% in 2012 and 4.3% in 2011, according to the IMF.

From the perspective of a US$ buyer the price decline has been much greater, since the Rouble has lost half of its value against the U.S. dollar, from an exchange rate of RUB 33.12 = US$1 in November 2013, to RUB 66.28= US$1 in November 2015.

Ukraine's housing market has improved, despite the continuing political crisis and trade war with Russia, and worsening economic conditions. Average prices of new residential properties dropped only 5.5% in Kiev during the year to Q3 2015, a sharp improvement from the decline of 36.12% during the year to Q3 2014. Quarter-on-quarter, house prices fell only slightly in Q3 2015, by 0.61%.

In an effort to curb inflationary pressures, the central bank raised the benchmark interest rate from 19.5% to 30% in March 2015, the world's highest. However, the central bank has recently reversed its monetary policy by cutting the key rate to 27% in August 2015 and to 22% in September 2015, amidst a faltering economy.

The hryvnia has lost almost two-thirds of its value against the U.S. dollar in recent months, from an exchange rate of UAH8.2507 = US$1 in January 2014, to UAH21.6765 = US$1 in October 2015. Inflation stood at 46.4% in October 2015, having peaked at 60.9% in April 2015 after a plunge in the national currency and an increase in household utility bills. The economy is expected to shrink 9% this year, after contracting by 6.8% in 2014 and 0.03% in 2013, according to the IMF.

Other weak European housing markets included Greece, with house prices falling by 4.35% during the year to Q3 2015, Macedonia (-4.02%) and Finland (-0.20%). All, except Finland, saw negative quarterly growth during the latest quarter. In addition, Greece and Finland performed better during the year to Q3 2015 than the previous year.

Most of Asia experienced strong house price rises

Seven of the ten Asian markets for which figures are available performed better during the year to Q3 2015 as compared to the previous year. Six saw house prices rise over the same period.

Hong Kong remains the strongest performer in Asia and the housing market with the third highest housing price rises in our global survey. Its residential property prices surged by 12.64% during the year to Q3 2015, a sharp improvement from the 1.76% y-o-y increase during the previous year to Q3 2014. Dwelling prices rose by 1.12% q-o-q during Q3 2015.

During the first ten months of 2015, the total number of homes sold in Hong Kong fell by 7.8% from the same period last year, to 49,113 units, while the value of property transactions increased 3% to HKD365.9 billion (US$47.21 billion) over the same period, according to the Ratings and Valuation Department (RVD). Hong Kong's economy is expected to grow by 2.5% this year, after growth of 2.5% in 2014, 3.1% in 2013 and 1.7% in 2012.

Likewise in Japan, housing prices rose strongly during the year to Q3 2015, despite an economic recession. In Tokyo, the average price of existing condominiums rose by 8.97% during the year to Q3 2015, up from a meagre growth of 0.39% the previous year. Residential property prices rose by 1.98% q-o-q in Q3 2015.

Demand remains strong. Existing condominium sales in Tokyo rose by 5.7% to 26,483 units in the first nine months of 2015 compared to the same period last year, according to The Land Institute of Japan. Likewise, sales of existing detached houses in Tokyo also increased 6% to 12,882 units over the same period. However the Japanese economy slid back into recession with an annualized GDP contraction of 0.8% in Q3 2015, following a contraction of o.7% in Q2 2015, caused largely by the growth slowdown in China and the weak global outlook. The Japanese economy is expected to grow by only 0.6% this year, after shrinking by 0.1% the previous year. To buoy growth, Prime Minister Shinzo Abe recently unveiled his new "three arrows" policy - which targets boosting Japan's GDP to ¥600 trillion (US$5 trillion), raising the fertility rate, and pursuing social welfare reforms.

However the Japanese residential market's gains have been completely counterbalanced from a US$-based investor's perspective by the decline of the Japanese Yen from ¥77.50= 1US$ in November 2011, to ¥122.54 = 1US$ in November 2015.

In the Philippines, the average price of 3-bedroom condominium units in Makati CBD rose by 5.41% during the year to Q3 2015, after annual increases of 6.61% in Q2 2015, 5.4% in Q1 2015, 4.29% in Q4 2014, and 3.58% in Q3 2014. Housing prices increased 1.27% q-o-q during Q3 2015.

Makati CBD property prices soared by 24.6% from Q1 2011 to Q4 2014, amidst rapid economic growth. Philippine economic growth is expected to be around 6% this year, after GDP growth of 6.1% in 2014, 7.1% in 2013 and 6.7% in 2012.

China's housing market made a strong comeback, after many government measures to support the housing market. In Shanghai the price index of second-hand houses rose 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%.

The Chinese government recently announced a plan to purchase unsold residential properties and convert them into low-cost housing to reduce inventory levels. The government has also eased property curbs over the past year, and in September 2014 the central bank loosened mortgage restrictions, giving homeowners with paid-off mortgages who want a second property the same advantages as first-time buyers, including a 30% minimum down payment (previous minimum: 60%).

The central bank cut its benchmark one-year lending rate by 25 basis points to 4.35% in October 2015, the sixth rate cut since November 2014. Mortgage interest rates for first-home purchases fell to a new record low of 4.66% in November 2015.

These measures have been effective. In the first nine months of 2015, the value and the area of new residential property sales in China rose by 18.2% and 8.2%, respectively, from a year earlier, according to the National Bureau of Statistics. The Chinese economy grew by an annualized rate of 6.9% in Q3 2015, slightly down from the 7% growth the previous quarter. Economic growth is projected at 6.8% this year, down from 7.3% in 2014, 7.7% in 2013, 7.7% in 2012 and 9.5% in 2011, according to the IMF.

In Thailand, housing prices rose by 3.4% during the year to Q3 2015, a slight improvement from annual growth of 2.15% the previous year. House prices increased 3.15% during the latest quarter.

Amidst political uncertainty, the Thai economy is projected to expand by a modest 2.6% this year, after annual growth of 0.9% in 2014, 2.8% in 2013 and 7.3% in 2012, according to the National Economic and Social Development Board.

South Korea's nationwide housing purchase price index rose by 3.4% during the year to Q3 2015, an improvement from the annual rise of 2.15% in Q3 2014 and the biggest y-o-y rise in the past 7 years, amidst low interest rates and relaxed mortgage lending rules. House prices increased by 0.72% q-o-q during the latest quarter.

Home sales surged by 30% y-o-y to 816,000 units in the first eight months of this year, the highest level since 2006. However, a housing reversal is expected next year as the government plans to impose tougher lending rules amidst swelling household debt. Korea's economy is expected to expand by 2.7% this year, after growth rates of 3.3% in 2014, 2.9% in 2013, 2.3% in 2012, and 3.7% in 2011, according to the IMF.

Some Asian housing markets were weak

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% during the year to Q3 2015, its eighth consecutive quarter of house price falls. House prices fell by 1.06% q-o-q during the latest quarter.

Both demand and supply continue to fall in Singapore. The number of private residential units sold fell by 3.7% to 5,599 units in the first three quarters of 2015 from the same period last year, according to the Urban Redevelopment Authority. The number of uncompleted private residential units launched also fell by about 6.2% to 5,723 units over the same period.

Singapore's economy is expected to expand by 2% this year, after growth of 2.9% in 2014, 4.4% in 2013, 3.4% in 2012, and 6.2% in 2011.

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 housing market cooling measures. This was in sharp contrast with the increase of 3.42% during the year to Q3 2014. House prices dropped 2.4% during Q3 2015.

Despite this, demand is rising again. In November 2015, housing transactions in Taipei rose by 10.8% y-o-y to 2,533 units, based on government figures. Transactions rose in most of the country's six special municipalities, indicating that the market could be stabilizing.

In Q3 2015, Taiwan's economy contracted by 1.01% from a year earlier, according to the Directorate General of Budget, Accounting and Statistics. This was Taiwan's weakest performance since Q2 2009, amidst poor exports due to slowing demand from China. The country's GDP growth is expected to be 1.56% this year, from 3.8% in 2014, 2.2% in 2013, 2.1% in 2012 and 3.8% in 2011.

In Indonesia, residential prices in the country's 14 largest cities fell by 1.49% during the year to Q3 2015, the third consecutive quarter of y-o-y price falls since Q3 2012 and in contrast with the annual rise of 2.77% a year earlier. House prices fell by 0.67% q-o-q during the latest quarter.

Residential property sales dropped between 7.66% and 10.84% in Q3 2015 from the previous quarter, according to the Bank of Indonesia. In an effort to attract foreign investors, in June 2015 the Indonesian government unveiled a plan to finally allow foreigners to purchase luxury apartments in the country.

In Q3 2015, the Indonesian economy expanded by 4.73% from a year earlier, at par with growth rates of 4.67% in Q2 2015 and 4.72% in Q1 2015. Economic growth is expected to be 4.66% this year, after growth of 5.8% in 2014.

Vietnam's housing market has been stabilizing, with house prices falling by just 0.06% y-o-y in Q3 2015 from annual declines of 0.27% in Q2 2015 and 0.48% in Q1 2015. House prices were unchanged during the latest quarter.

Effective July 1 2015, the government introduced a new law allowing foreigners with a valid visa, and foreign companies and international organizations operating in Vietnam, to buy houses and apartments. Previously, only those married to Vietnamese, or foreigners deemed to be contributing to national development could buy property.

Vietnam's GDP grew by 6.81% in Q3 2015 from a year earlier, according to the General Statistics Office. Vietnam's economy is expected to grow by 6.2% to 6.5% this year, the fastest growth since 2011.

U.S. house prices continue to rise strongly

The U.S. housing market remains strong, amidst satisfactory economic growth. The S&P/Case-Shiller seasonally-adjusted national home price index rose by 4.96% during the year to end-Q3 2015 (inflation-adjusted), after annual rises of 4.3% in Q2 2015, 4.43% in Q1 2015, 3.76% in Q4 2014, and 3.02% in Q3 2014. House prices increased by 1.34% during the latest quarter.

The Federal Housing Finance Agency's seasonally-adjusted purchase-only U.S. house price index rose by 5.6% y-o-y in Q3 2015, up from an annual increase of 2.95% in Q3 2014 (inflation-adjusted). The index increased by 0.99% q-o-q during the latest quarter.

House prices continue to rise in all 20 major U.S. cities according to the Case-Shiller index, with San Francisco registering the biggest inflation-adjusted increase of 11.4% y-o-y in Q3 2015, followed by Denver (11%), Portland (10.2%), Dallas (9.1%), Seattle (8.3%), Miami (7.8%), San Diego (6.7%), Los Angeles (6.6%), Tampa (6.6%), and Atlanta (6.2%). Chicago and Washington saw the lowest growth in house prices at 1.3% and 2.3%, respectively.

Residential construction remains strong. New privately-owned housing units authorized (seasonally-adjusted annualized rate) rose by 2.7% y-o-y to 1,150,000 units in October 2015, according to the U.S. Census Bureau. Over the same period, the total number of housing starts fell by 1.8% while completions rose by 5.2%.

Demand is surging. New house sales were up by 18% to about 393,000 units during the first nine months of 2015 as compared to the same period last year, according to the U.S. Census Bureau.

U.S. home builder sentiment stood at 62 in November 2015, down from 65 a month earlier but up from 58 the same period last year, according to the National Association of Home Builders. A reading of 50 is the midpoint between positive and negative sentiments.

Mortgages remain cheap despite slight increases in mortgage interest rates in recent months. The average interest rate for 1-year adjustable rate mortgages (ARMs) was 2.63% in November 2015, up from 2.44% the previous year while the 5-year adjustable rate mortgage was unchanged at 3%, according to Freddie Mac. The average interest rate for 15-year FRMs stood at 3.16% in November 2015, and 3.94% for 30-year FRMs.

In the third quarter of 2015, the U.S. economy grew by an annual rate of 2.1%, after 3.9% in Q2 2015 and 0.6% in Q1 2015, as businesses cut back on restocking warehouses to reduce an inventory bloat, according to the U.S. Bureau of Economic Analysis. Despite this, the U.S. economy is expected to expand by 2.6% this year, the strongest growth since 2006, according to the International Monetary Fund (IMF).

Canada's housing market stronger

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 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.

Biggest rises: Hamilton saw the biggest inflation-adjusted house price increases of 9.4% during the year to Q3 2015, followed by Vancouver (9.3%), Toronto (7.6%), and Victoria (4.9%).

Biggest falls: Quebec recorded the biggest price drop of 3.8% in Q3 2015 from a year earlier, followed by Winnipeg (-3.2%), Halifax (-1.2%), Montreal (-1%), Ottawa (-0.8%), Calgary (-0.7%), and Edmonton (-0.2%).

Sales rose slightly by 0.1% in October 2015 from the same period last year, according to the Canadian Real Estate Association (CREA). Sales were up in just over half of all local markets, led by activity in the Lower Mainland of British Columbia, the Greater Toronto Area, and Montreal. There were about 5.5 months of inventory nationally in October 2015, down from 5.7 months the previous month.

The Bank of Canada held its key interest rate unchanged at 0.50% in early-December 2015, after cutting it twice this year in response to plunging oil prices. The key rate had previously been 1% from September 2010 to December 2014.

In the third quarter of 2015, Canada's economy climbed out of recession with an annualized real GDP growth rate of 2.3% after contracting by 0.3% in Q2 2015 and 0.7% in Q1 2015, thanks to increased exports and household consumption, according to Statistics Canada. The economy is expected to grow by 1.1% this year and by another 2% in 2016, after expanding by an average of 2.5% in 2010-14, according to Bank of Canada.

Middle East housing markets are mixed

Both the world's strongest (Qatar) and weakest (Dubai) housing markets in our global house price survey are from the Middle East. Of the four Middle Eastern housing markets included in our survey, two registered rising house prices during the year to Q3 2015 while the other two showed plunging house prices. However, all performed worse than the previous year.

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 skyrocketing by 16.42% during the year to Q3 2015, after annual price rises of 21.64% in Q2 2015, 27.81% in Q1 2015, 31.81% in Q4 2014, 37.2% in Q3 2014, and 24.85% in Q2 2015. Property prices rose by 4.23% q-o-q during the latest quarter.

Demand is surging. The value of real estate transactions in Qatar rose by 18% y-o-y to QAR36 billion (US$9.8 billion) in the first half of 2015, and has almost tripled over the last five years. The economy is projected to expand by 4.7% this year and by another 4.9% in 2016, after real GDP growth rates of 4% in 2014, 4.6% in 2013, 4.9% in 2012, and 13.4% in 2011, according to the IMF.

Israel's housing market is slowing again. The nationwide average price of owner-occupied dwellings rose by just 2.33% during the year to Q3 2015, after annual increases of 7.7% in Q2 2015, 8.5% Q1 2015, 7.41% in Q4 2014, and 5.94% in Q3 2014. However, house prices dropped 3.15% q-o-q in Q3 2015.

Despite this, property demand continues to surge. New dwelling sales soared by 66% y-o-y 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.

Dubai remains the world's weakest housing market. Dubai residential property prices plunged by 14.1% during the year to Q3 2015, the third consecutive quarter of house price falls, and the biggest y-o-y drop since Q1 2011. House prices fell by 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.

New Zealand's housing market shows spectacular growth

New Zealand's nationwide median house prices surged by 14.86% during the year to Q3 2015, after annual rises of 5.19% in Q2 2015, 7.85% in Q1 2015, 4.6% in Q4 2014, 3.93% in Q3 2014, 6.66% in Q2 2014, and 8.36% in Q1 2014. House prices soared by 7.1% q-o-q during Q3 2015.

Total dwellings sold were up 18.6% y-o-y to 7,838 units in October 2015, according to the Real Estate Institute of New Zealand (REINZ). All ten regions recorded increases in sales volumes, with Waikato/Bay of Plenty registering the biggest y-o-y rise of about 54% in October 2015, followed by Hawke's Bay (52%), and Central Otago Lakes (50%). New dwelling consents were 2,349 units in October 2015, up by 9.2% from a year earlier, according to Statistics New Zealand. Likewise, the value of residential building consents rose by 2.4% over the same period.

New Zealand's economy is expected to expand by a modest 2.2% this year and by another 2.4% in 2016, according to the IMF. Economic growth stood at 3.3% in 2014, its strongest performance since 2007, after modest GDP growth of 2.5% in 2013, 2.9% in 2012 and 1.3% in 2011.

The Reserve Bank of New Zealand (RBNZ) cut its official cash rate (OCR) by another 25 basis points to 2.75% in September 2015, after cutting it in June and July 2015, in an effort to boost economic growth amidst low inflation.

Brazil's house prices falling; Mexico grows stronger

Brazil's housing market continues to plunge, amidst worsening economic and political crisis. 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 sharp contrast with the annual rise of 3.29% in a year ago. Quarter-on-quarter, house prices dropped 1.11% in Q3 2015.

Brazil's economy remains in deep recession, and its currency is plummeting further. Worse, the country's political crisis sees no abating as President Dilma Rousseff faces an impeachment trial amidst the massive Petrobras corruption scandal. Consumer and investor confidence continues to decline.

Brazil officially entered recession in Q2 2015, when the economy shrank by 1.9% from the previous quarter after a q-o-q contraction of 0.7% in Q1 2015. The economy contracted by another 1.7% q-o-q in Q3 2015. The economy is expected to contract by about 3% this year, after growing by 0.15% in 2014, 2.7% in 2013, 1.8% in 2012, 3.9% in 2011 and 7.6% in 2010, according to the IMF.

The Brazilian Real has significantly depreciated. It lost more than 70% of its value against the U.S. dollar to reach an average monthly exchange rate of BR3.7833 = 1US$ in November 2015, down from BR2.2188 = 1US$ in July 2014.

House prices in Sao Paulo soared by 113% (inflation-adjusted) from 2007 to 2013, while Rio De Janeiro's rose by 144%, as interest rates were progressively cut from 26% to 7.25% between 2003 and 2012. In 2014, Sao Paulo's house prices rose by a meagre 0.83%.

However starting in the first half 2013, the central bank raised the benchmark interest rate nine times to 11% in April 2014, causing a sharp economic slowdown. After holding the key interest rate steady for almost seven months, the central bank decided to raise it again by 25 basis points in October 2014, and by 50 basis points in December 2014. In the first 11 months of 2015, the central bank again raised the key rate five times to 14.25%, the highest level for almost six years.

Mexico's housing market is growing stronger, buoyed by strong demand in resort communities. The nationwide house price index rose by 5.45% during the year to Q3 2015, up from annual increases of 3.43% in Q2 2015, 1.73% in Q1 2015, 0.84% in Q4 2014, and 0.01% in Q3 2014. In a quarterly basis, house prices increased 2.98% in Q3 2015.

Foreign homebuyers are boosting the property market. American and Canadian buyers are returning to Mexico, after a several-year slump, thanks to low oil prices and the strong US dollar, pushing home values up.

The Mexican economy is expected to expand by a modest 2.3% this year, after growing by 2.1% in 2014, 1.4% in 2013, 4% in both 2011 and 2012, and 5.1% in 2011, according to the IMF.

South Africa's housing market remains weak

South Africa's price index for medium-sized apartments fell slightly by 0.19% during the year to Q3 2015, in contrast to the increase of 2.89% during the same period last year. House prices increased 0.69% q-o-q in Q3 2015.

South Africa's economy is expected to expand by about 1.4% this year, after growing by 1.5% in 2014, 2.2% both in 2013 and 2012, and 3.2% in 2011, according to the IMF.

Despite the sluggish economic growth, the South African Reserve Bank (SARB), the country's central bank, hiked its benchmark repurchase rate by 25 basis points to 6.25% in November 2015, amidst increasing inflationary pressures and an expected U.S. rate hike that could put further pressure on the rand.

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