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Press Release

Q1 2016: Global house price boom continues, led by Europe and North America, but sharp slowdown in Asia, Middle East, and NZ

Jun 14, 2016


The world's housing markets remain two-tiered, with most of Europe and North America still experiencing strong house price rises while Asia, the Middle East and New Zealand are slowing sharply. The five strongest housing markets in our global survey during the year to Q1 2016 were Turkey (+19.05%), China (+16.64%), Sweden (+12.1%), Romania (+11.55%), and Qatar (9.27%).

The biggest y-o-y house-price declines in Q1 2016 were in Russia (-13.04%), Mongolia (-11.93%), Puerto Rico (-10.33%), Hong Kong (-9.91%), Egypt (-9.49%), and UAE (-9.26%).

During the first quarter of 2016, house prices rose in 31 out of the 45 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 32 countries, and declines in 13 countries.

Momentum. During Q1 2016, only 21 housing markets showed stronger upward momentum, while 24 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 the first quarter of 2016. 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. Six of the ten strongest housing markets in our global survey are in Europe. Overall, house prices rose in 18 of the 22 European housing markets for which figures were available during the year to Q1 2016, one of the highest number recorded since the global financial crisis.

  • Turkey remains the strongest performer in our global survey, with house prices surged by a record 19.05% during the year to Q1 2016, from a y-o-y increase of 11.61% last year. House prices increased 4.99% q-o-q in Q1 2016. Turkey's housing market was boosted by strong foreign investment and growing population, despite a collapsing currency, dissatisfaction with the government, chaos on Turkey's doorstep in Syria and Kurdish Iraq, and rising internal tensions.

    Sweden remains very strong with house prices soaring by 12.1% during the year to Q1 2016, from y-o-y increases of 12.5% in Q4 2015, 11.09% in Q3 2015, 10.68% in Q2 2015, and 9.14% in Q1 2015. This surge can be attributed to robust economic growth, the central bank's negative interest rates and a shortage of housing supply. House prices increased 2.37% q-o-q in Q1 2016.

    Romania's housing market continues to show spectacular performance, amidst strong economic growth and the government's focus on rebuilding public trust. The average selling price of apartments rose by a record 11.55% during the year to Q1 2016, in sharp contrast with a y-o-y decline of 0.99% in a year earlier. House prices surged 7.5% q-o-q in Q1 2016.

    Ireland's house prices continue to rise, albeit at a slower pace, with residential property prices up by 7.74% during the year to end-Q1 2016, after y-o-y increases of 6.53% in Q4 2015, 9.24% in Q3 2015, 10.81% in Q2 2015, and 17.57% in Q1 2015. On a quarterly basis, Irish house prices dropped slightly by 0.12% in Q1 2016.

    Germany's housing market remains robust, mainly due to housing supply shortages and strong economic fundamentals. The price index for apartments rose by 6.25% during the year to Q1 2016, from annual rises of 7.62% in Q4 2015, 4.3% in Q3 2015, 4.2% in Q2 2015, and 6.04% in Q1 2015. Apartment prices rose 1.95% q-o-q in Q1 2016.

    Other strong European housing markets included the Netherlands, with house prices rising by 6.09% y-o-y in Q1 2016, Iceland (5.1%), the UK (4.78%), Vilnius, Lithuania (3.56%), Macedonia (3.29%), and Portugal (3.18%). All, except Portugal, saw positive quarterly growth during the latest quarter. However, only the Netherlands, Macedonia, and Portugal performed better in Q1 2016 compared to a year earlier.

    European housing markets with minimal house price rises included Riga, Latvia, with house prices rising by 2.24% during the year to Q1 2016, Spain (1.69%), Slovak Republic (1.53%), Norway (1.38%), Tallinn, Estonia (1.14%), Finland (0.82%), and Switzerland (0.33%). All, except Estonia, recorded positive quarter-on-quarter growth in Q1 2016. In addition, all, except Norway, Estonia, and Switzerland, performed better in Q1 2016 than the previous year.

  • Europe's weakest housing markets. Russia remains the weakest housing market in our global survey, amidst low oil prices, the collapsing ruble, and a steep economic contraction. Russian residential property prices plunged by 13.04% y-o-y in Q1 2016, worse than last year's decline of 9.65%. Russia's house prices fell by 3.93% during the latest quarter.
  • Greece's housing market remains down, its economic crisis seemingly unending, and social unrest rising. The average price of dwellings dropped 4.39% during the year to Q1 2016, worse than its 1.78% price decline in Q1 2015. Quarter-on-quarter, house prices increased 1.71% in Q1 2016. House prices have been falling in Athens since 2008.

    Ukraine's housing market has dramatically improved after the conflict with Russia officially ended last year. House prices in Kiev fell by just 2.97% y-o-y in Q1 2016, a sharp improvement from the annual decline of 36.52% a year ago. House prices dropped 0.65% quarter-on-quarter in Q1 2016.

    Montenegro's dwelling prices dropped 1.06% y-o-y in Q1 2016, down from an annual rise of 6.91% in the previous quarter but better than the y-o-y decline of 12.81% a year earlier. On a quarterly basis, house prices dropped 5.38% during the latest quarter.

  • Asian housing markets weakening, except China. Six of the eleven Asian markets for which figures are available saw house price increases during the year to Q1 2016, though most were just modest increases. In fact, only China's house prices rose strongly last year. Six Asian housing markets were stronger in Q1 2016 compared to a year earlier.
  • China's housing market soared to new highs, after government measures to support the housing market. In Shanghai the price index of second-hand houses surged by 16.64% y-o-y in Q1 2016, in sharp contrast to a decline of 2.9% in the same period last year and the highest annual rise since Q2 2008. During the latest quarter, house prices in Shanghai rose by 6.18%.
    Japan's housing prices continue to rise during the year to Q1 2016, despite weak economy. In Tokyo, the average price of existing condominiums rose by 5.5% during the year to Q1 2016, from y-o-y increases of 0.92% in Q4 2015, 8.97% in Q3 2015, 6.2% in Q2 2015, and 6.34% in Q1 2015. Residential property prices rose by 5.49% q-o-q in Q1 2016.

    The Philippines' average price of 3-bedroom condominium units in Makati CBD rose by 3.9% during the year to Q1 2016, from y-o-y increases of 2.96% in Q4 2015, 5.41% in Q3 2015, and 6.61% in Q2 2015 and 5.4% in Q1 2015. Housing prices increased 2.54% q-o-q during Q1 2016.

    Asian housing markets with minimal house price rises included Vietnam, with house prices rising by 1.93% during the year to Q1 2016, South Korea (1.81%), and Thailand (0.42%). Vietnam and Thailand recorded positive quarter-on-quarter growth in Q1 2016 of 0.67% and 0.54%, respectively, while South Korea saw a quarterly decline of 0.27%. Vietnam and South Korea showed better performance in Q1 2016 compared to the previous year.

  • Some Asian housing markets saw falling prices. House prices fell in five of the eleven Asian markets for which figures were available during the year to Q1 2016.
  • Mongolia is now the weakest Asian housing market and the second worst performer in our global house price survey, amidst a sharp economic slowdown. The nationwide house prices plunging by 11.93% y-o-y in Q1 2016. In a quarterly basis, house prices dropped 2.45% during the latest quarter.

    Hong Kong's housing market is now surprisingly depressed, with residential property prices falling by 9.91% during the year to Q1 2016, in sharp contrast with the 14.62% y-o-y rise a year earlier. House prices dropped 5.93% q-o-q in Q1 2016.

    Taiwan's nationwide house prices dropped 7.65% y-o-y in Q1 2016, after an increase of 0.98% a year earlier, mainly due to the government's housing market cooling measures. This was its fourth consecutive quarter of annual decline since 2008. House prices dropped 2.09% q-o-q in Q1 2016.

    Singapore's housing market is still struggling, amidst a slowing economy. House prices fell by 2.35% during the year to Q1 2016, after y-o-y declines of 3.05% in Q4 2015, 3.62% in Q3 2015, 3.35% in Q2 2015, and 3.54% in Q1 2015. House prices fell by 0.43% q-o-q during the latest quarter.

    Indonesia's housing market remains weak, with residential prices in the country's 14 largest cities falling by 0.16% y-o-y in Q1 2016, from annual declines of 0.2% in Q4 2015, 1.49% in Q3 2015, 1.07% in Q2 2015, and 0.26% in Q1 2015. House prices fell slightly by 0.24% q-o-q during the latest quarter.

  • North America's housing markets remain healthy. The U.S. housing market remained robust, with continued increase in demand and strong residential construction. The S&P/Case-Shiller seasonally-adjusted national home price index rose by 4.29% during the year to Q1 2016, after annual rises of 4.52% in Q4 2015, 4.82% in Q3 2015, 4.3% in Q2 2015, and 4.41% in Q1 2015. House prices increased by 0.21% during the latest quarter. This was supported by Federal Housing Finance Agency's seasonally-adjusted purchase-only U.S. house price index, which rose by 4.54% during the year to Q1 2016 (inflation-adjusted), slightly down from y-o-y increases of 5.36% in Q4 2015, 5.68% in Q3 2015, 5.62% in Q2 2015, and 5.29% in Q1 2015. The index increased by 1.24% q-o-q during the latest quarter.Both indices were adjusted for inflation, as are other figures used in this survey.
  • Canada's housing market continues to grow stronger, despite repeated market-cooling measures. House prices in the country's eleven major cities rose by 5.67% during the year to Q1 2016, up from 3.57% the previous year and the biggest annual increase since Q2 2010. House prices increased 0.2% q-o-q in Q1 2016.

  • Middle East housing markets weakening. All of the four Middle Eastern housing markets included in our global survey performed worse in Q1 2016 than the previous year. Over the same period, two countries had rising house prices while the other two experienced sharp house price declines.
  • Qatar's property market is now weakening rapidly, though it remained the world's fifth strongest housing market in our survey. The nationwide real estate price index rose by 9.27% during the year to Q1 2016, sharply down from a y-o-y rise of 27.81% in Q1 2015. Property prices rose by 4.51% q-o-q during the latest quarter.

    Israel's housing market is also softening, amidst weakening demand and slowing economy. The nationwide average price of owner-occupied dwellings rose by 4.52% during the year to Q1 2016, a slowdown from a y-o-y rise of 8.5% a year ago and the lowest annual increase since Q1 2014. House prices increased 1.37% q-o-q in Q1 2016.

    Dubai's housing market remains depressed, with the residential property prices falling by 9.26% during the year to Q1 2016. This is worse than the annual drop of 2.72% in Q1 2015 and its fourth consecutive quarter of y-o-y declines. House prices fell by 0.33% during the latest quarter.

    Egypt's housing market continues to struggle, with the nationwide real estate index plunging by 9.49% during the year to Q1 2016. This is in sharp contrast with the rise of 2.07% in Q1 2015. Despite this, house prices rose by 12.21% q-o-q during the latest quarter.

  • Pacific. New Zealand's housing market is slowing sharply, amidst weakening economic growth. The nationwide median house prices rose by 3.63% during the year to Q1 2016, a sharp slowdown from a y-o-y rise of 7.85% in the same period last year. Despite this, house prices rose by 6.25% q-o-q during Q1 2016.
  • Africa. South Africa's housing market outlook is bleak, with the economy expected to post meager growth this year. The price index for medium-sized apartments fell by 1.3% during the year to Q1 2016, in contrast to the annual increase of 1.52% the previous year. House prices dropped 2.18% q-o-q in Q1 2016.
  • Latin America is mixed. Brazil's housing market remains depressed, amidst the ongoing economic and political crisis. In Sao Paulo, house prices fell by 7.59% during the year to Q1 2016, its fifth consecutive quarter of falling house prices. Quarter-on-quarter, house prices dropped 2.37% in Q1 2016.
  • Mexico's housing market grew stronger, buoyed by strong demand in resort communities and by sustainable economic growth. The nationwide house price index rose by 5.26% y-o-y in Q1 2016, an improvement from an annual rise of 1.73% in the same period last year. However on a quarterly basis, house prices dropped 1.57% in Q1 2016.

Source: Various series, data descriptions and sources here

Europe's housing boom continues

Six of the ten strongest housing markets in our global survey are in Europe. House prices rose in 18 of the 22 European housing markets for which figures were available during the year to Q1 2016, one of the highest number recorded since the global financial crisis.

Turkey remains the strongest performer in our global survey, with house prices surged by a record 19.05% during the year to Q1 2016, from a y-o-y increase of 11.61% last year. House prices increased 4.99% q-o-q in Q1 2016. Turkey's housing market was boosted by strong foreign investment and growing population, despite a collapsing currency, dissatisfaction with the government, chaos on Turkey's doorstep in Syria and Kurdish Iraq, and rising internal tensions.

From 2007 to 2011, house prices in Turkey fell by 29% inflation-adjusted, due to economic growth slowing sharply to 0.7% in 2008, after GDP growth during 2002-2007 of 6.8% annually. Existing house prices plunged 14.65% in 2008, by 2.82% in 2009, by 3.54% in 2010 and by 2.39% in 2011. The housing market finally recovered in 2012, with house prices rising by an average of 6.1% annually from 2012 to 2014. The economy grew by 3.8% in 2015, after GDP growth rates of 2.9% in 2014, 4.2% in 2013, 2.1% in 2012, 8.8% in 2011, and 9.2% in 2010. The economy is projected to grow by 3.8% this year and by another 3.4% in 2017, according to IMF.

Meanwhile the decline of the Turkish lira against all major currencies, especially the euro, made residential properties more affordable to foreign homebuyers. In one year, the lira lost about 11.2% of its value against the euro to TRY3.3229 = EUR1 in May 2016. Over the same period, the lira depreciated by 9.9% against the US dollar to TRY2.9385 = USD1.

Sweden remains very strong with house prices soaring by 12.1% during the year to Q1 2016, from y-o-y increases of 12.5% in Q4 2015, 11.09% in Q3 2015, 10.68% in Q2 2015, and 9.14% in Q1 2015. This surge can be attributed to robust economic growth, the central bank's negative interest rates and a shortage of housing supply. House prices increased 2.37% q-o-q in Q1 2016.

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 slowdown in economic growth, but house price growth resumed in Q4 2012 and price rises have been continuous since then. The Swedish economy grew strongly in Q1 2016, registering a GDP growth of 4.2% y-o-y from 4.9% in Q4 2015.  The economy is projected to expand by 3.7% this year, after growing by 4% in 2015, 2.3% in 2014, and 1.2% in 2013.

Romania's housing market continues to show spectacular performance, amidst strong economic growth and the government's focus on rebuilding public trust. The average selling price of apartments rose by a record 11.55% during the year to Q1 2016, in sharp contrast with a y-o-y decline of 0.99% in a year earlier. House prices surged 7.5% q-o-q in Q1 2016.
This comes as a surprise given Romania's disappointing performance from 2008 to 2014, amidst struggling economy. House prices plunged by 24.22% in 2009, 22.08% in 2010, 6.99% in 2011, 5.96% in 2012, 10.43% in 2013, and 1.59% in 2014. It was only by the second half of 2015 that the housing market has fully recovered. The Romanian economy expanded by a robust 3.7% in 2015, one of the EU's highest growth rates and in contrast to almost zero growth between 2009 and 2014. Romania's economy is expected to grow by 4.2% this year, due to tax cuts and salary increases.

Ireland's house prices continue to rise, albeit at a slower pace, with residential property prices up by 7.74% during the year to end-Q1 2016, after y-o-y increases of 6.53% in Q4 2015, 9.24% in Q3 2015, 10.81% in Q2 2015, and 17.57% in Q1 2015. On a quarterly basis, Irish house prices dropped slightly by 0.12% in Q1 2016.

The Irish economy is now the fastest-growing economy in the EU, with GDP growth of 7.8% in 2015, after growing by 5.2% in 2014, 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 5% this year and by another 3.6% in 2017. 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.

Germany's housing market remains robust, mainly due to housing supply shortages and strong economic fundamentals. The price index for apartments rose by 6.25% during the year to Q1 2016, from annual rises of 7.62% in Q4 2015, 4.3% in Q3 2015, 4.2% in Q2 2015, and 6.04% in Q1 2015. Apartment prices rose 1.95% q-o-q in Q1 2016.

Long a picture of housing market stability, Germany was one of the few countries that avoided a house-price slump in the wake of the 2008-2009 global financial crisis. Since then, extremely low interest rates have encouraged demand. The economy is expected to expand by 1.5% this year and by another 1.6% in 2017, after growing by 1.5% in 2015, 1.6% in 2014, 0.4% in 2013 and 0.6% in 2012, according to the IMF.

Other strong European housing markets included the Netherlands, with house prices rising by 6.09% y-o-y in Q1 2016, Iceland (5.1%), the UK (4.78%), Vilnius, Lithuania (3.56%), Macedonia (3.29%), and Portugal (3.18%). All, except Portugal, saw positive quarterly growth during the latest quarter. However, only the Netherlands, Macedonia, and Portugal performed better in Q1 2016 compared to a year earlier.

European housing markets with minimal house price rises included Riga, Latvia, with house prices rising by 2.24% during the year to Q1 2016, Spain (1.69%), Slovak Republic (1.53%), Norway (1.38%), Tallinn, Estonia (1.14%), Finland (0.82%), and Switzerland (0.33%). All, except Estonia, recorded positive quarter-on-quarter growth in Q1 2016. In addition, all, except Norway, Estonia, and Switzerland, performed better in Q1 2016 than the previous year.

Russia and Greece remain depressed

Russia remains the weakest housing market in our global survey, with residential property prices plunging by 13.04% y-o-y in Q1 2016, worse than last year's decline of 9.65%. Russia's house prices fell by 3.93% during the latest quarter.

The substantial difference between the nominal y-o-y decline in Russian house prices (-5.75%) and the real decline (-13.04%) was mainly due to Russia's very high inflation rate. The overall inflation rate surged to 15.5% in 2015, the highest rate since 2002. Inflation is expected to slow to 8.4% this year, according to the IMF.

Russia's housing market continues to suffer from the country's financial crisis, largely unleashed by low oil prices, but also due to the intervention in Syria and the negative impact of the recent war with neighboring Ukraine. In May 2016, crude oil prices stood at US$49.10 per barrel, up by 32.2% from US$37.13 per barrel in December 2015 but still 52.5% down from US$103.40 per barrel two years ago. Russia's currency has collapsed, and interest rates are high.

In 2015, Russia's economy has experienced its steepest contraction since 2009, with GDP falling by 3.7%, according to the International Monetary Fund (IMF). The economy is expected to contract again by 1.8% this year, amidst international sanctions and low oil prices, according to the Ministry of Economic Development.

From the perspective of foreign homebuyers the price decline has been much greater, since the ruble has declined against major currencies. The ruble lost almost half of its value against the US dollar in just two years, from an exchange rate of RUB34.856 = US$1 in May 2014, to RUB65.872 in May 2016. Over the same period, the ruble depreciated against the euro by almost 36%, from RUB47.878 = EUR1 in May 2014 to RUB74.492 = EUR1 in May 2016.
Greece's housing market remains down, its economic crisis seemingly unending, and social unrest rising. The average price of dwellings dropped 4.39% during the year to Q1 2016, worse than its 1.78% price decline in Q1 2015. Quarter-on-quarter, house prices increased 1.71% in Q1 2016. House prices have been falling in Athens since 2008.

The Greek economy contracted by 0.2% in 2015, after meagre growth of 0.7% in 2014, and declines of 3.9% in 2013, 6.6% in 2012, 8.9% in 2011, 5.4% in 2010, 4.4% in 2009 and 0.4% in 2008. The economy is projected to shrink by another 0.3% this year before expanding by 2.7% in 2017, according to the European Commission.

Ukraine's housing market has dramatically improved, after the conflict with Russia officially ended last year. House prices in Kiev fell by just 2.97% y-o-y in Q1 2016, a sharp improvement from the annual decline of 36.52% a year ago. House prices dropped 0.65% quarter-on-quarter in Q1 2016. Ukraine's economy contracted by 9.9% last year, after declines of 6.6% in 2014 and 0.03% in 2013, according to the IMF. The economy is expected to return to growth this year, with GDP growth of 1.5%.

In Montenegro, prices of dwellings in new residential buildings dropped 1.06% y-o-y in Q1 2016, down from an annual rise of 6.91% in the previous quarter but better than the y-o-y decline of 12.81% a year earlier. On a quarterly basis, house prices dropped 5.38% during the latest quarter. The economy grew by 4.1% last year, its strongest growth since 2008. Economic growth this year is projected to be a healthy 4.7%.

Asian housing markets continue to lose steam

Six of the eleven Asian markets for which figures are available saw house price increases during the year to Q1 2016, though most were just modest increases. In fact, only China's house prices rose strongly last year. Six Asian housing markets were stronger in Q1 2016 compared to a year earlier.

China's housing market soared to new highs, after government measures to support the housing market. In Shanghai the price index of second-hand houses surged by 16.64% y-o-y in Q1 2016, in sharp contrast to a decline of 2.9% in the same period last year and the highest annual rise since Q2 2008. During the latest quarter, house prices in Shanghai rose by 6.18%.

Demand continues to rise, albeit at a slower pace. From double-digit growth in recent years, nationwide home sales are expected to rise by just under 5% this year - a reflection of China's slowing economy and developers' high debt levels.

China's strong house price rises conceal a massive problem of housing inventory, particularly in third-tier and fourth-tier cities. Currently, unsold homes are estimated at around 13 million. To solve this problem, the Chinese government recently announced a plan to purchase unsold residential properties and convert them into low-cost housing to reduce inventory levels. Moreover, in February 2016, the central bank cut the minimum mortgage downpayment for first-time buyers from 25% to 20%, in an effort to encourage demand.

The central bank kept its benchmark one-year lending rate at 4.35% in May 2016, after cutting it five times in 2015. The Chinese economy grew by 6.7% y-o-y in Q1 2016, slightly lower than the previous quarter's 6.8% growth but on track with the government's target growth this year of 6.5% to 7%. The second largest economy expanded by 6.9% in 2015, the lowest growth in 25 years.

In Japan, housing prices continue to rise during the year to Q1 2016, despite weak economy. In Tokyo, the average price of existing condominiums rose by 5.5% during the year to Q1 2016, from y-o-y increases of 0.92% in Q4 2015, 8.97% in Q3 2015, 6.2% in Q2 2015, and 6.34% in Q1 2015. Residential property prices rose by 5.49% q-o-q in Q1 2016.

Demand remains strong. Existing condominium sales in Tokyo rose by 7.8% y-o-y to 3,558 units in February 2016, according to The Land Institute of Japan. Likewise, sales of existing detached houses in Tokyo also increased 21.2% to 1,852 units over the same period. The Japanese economy grew much more than expected, at an annualized rate of 1.7% in Q1 2016, in sharp contrast with the previous quarter's 1.7% decline - avoiding another technical recession. Japan's economy is expected to grow by 0.7% this year, after expanding by 0.5% in the previous year.

Moreover from a US$-based investor's perspective, the Japanese residential market's gains was bolstered by the appreciation of the Japanese Yen from €120.875 = US$1 in May 2015, to €108.937 = US$1 in May 2016. However, this is not enough to offset the 31% drop in the value of yen against the dollar from 2012 to 2015.

In the Philippines, the average price of 3-bedroom condominium units in Makati CBD rose by 3.9% during the year to Q1 2016, from y-o-y increases of 2.96% in Q4 2015, 5.41% in Q3 2015, and 6.61% in Q2 2015 and 5.4% in Q1 2015. Housing prices increased 2.54% q-o-q during Q1 2016.

Makati CBD property prices soared by 28.3% from Q1 2011 to Q4 2015, amidst rapid economic growth. The Philippine economy grew by 6.9% in Q1 2016 from a year earlier, up from GDP growth rates of 6.5% in Q4 2015, 6% in Q3 2015, 5.8% in Q2 2015, and 5% in Q1 2015. The economy is projected to grow by 6% in 2016 and another 6.2% in 2017, according to the IMF.

Asian housing markets with minimal house price rises included Vietnam, with house prices rising by 1.93% during the year to Q1 2016, South Korea (1.81%), and Thailand (0.42%). Vietnam and Thailand recorded positive quarter-on-quarter growth in Q1 2016 of 0.67% and 0.54%, respectively, while South Korea saw a quarterly decline of 0.27%. Vietnam and South Korea showed better performance in Q1 2016 compared to the previous year.

Some Asian housing markets continue to disappoint

House prices fell in five of the eleven Asian markets for which figures were available during the year to Q1 2016.

Mongolia is now the weakest Asian housing market and the second worst performer in our global house price survey, amidst a sharp economic slowdown. The nationwide house prices plunging by 11.93% y-o-y in Q1 2016. In a quarterly basis, house prices dropped 2.45% during the latest quarter.

Mongolia's economy grew by just 2.3% in 2015, sharply down from GDP growth rates of 7.9% in 2014, 11.6% in 2013, 12.3% in 2012, 17.3% in 2011, and 7.3% in 2010. The economy is projected to expand by a meager 0.4% this year, amidst mounting external debt, falling budget revenues and low commodity prices.

Hong Kong's housing market is now surprisingly depressed, with residential property prices falling by 9.91% during the year to Q1 2016, in sharp contrast with the 14.62% y-o-y rise a year earlier. House prices dropped 5.93% q-o-q in Q1 2016.

The number of property transactions plummeted by 63% y-o-y to just 6,221 in the first quarter of 2016, according to the Ratings and Valuation Department (RVD), while sales values dropped 61% y-o-y to HK$44.68 billion (US$5.75 billion) over the same period. Hong Kong's economic growth slowed sharply to 0.8% during the year to Q1 2016, from 2.1% a year ago, mainly due to decline in tourist arrivals and falling retail sales. The economy is expected to grow by around 1% to 2% this year, after 2.4% in 2015, 2.6% in 2014 and 3.1% in 2013.

Taiwan's nationwide house prices dropped 7.65% y-o-y in Q1 2016, after an increase of 0.98% a year earlier, mainly due to the government's housing market cooling measures. This was its fourth consecutive quarter of annual decline since 2008. House prices dropped 2.09% q-o-q in Q1 2016.

Demand continues to plunge. In 2015, the value of housing transactions in Taiwan plunged by more than 20% from a year earlier, the weakest demand in almost 14 years. In Q1 2016, transactions fell further by 15.5% from a year earlier. Taiwan's economy is technically in recession, with GDP contracting by 0.89% in Q4 2015 and by another 068% in Q1 2016, according to the Directorate-General of Budget, Accounting and Statistics. The economy grew by just 0.65% in 2015, the weakest annual growth since 2009. The country's GDP growth is expected at 1.06% this year.

Singapore's housing market is still struggling, amidst a slowing economy. House prices fell by 2.35% during the year to Q1 2016, after y-o-y declines of 3.05% in Q4 2015, 3.62% in Q3 2015, 3.35% in Q2 2015, and 3.54% in Q1 2015. House prices fell by 0.43% q-o-q during the latest quarter.

Demand remains weak. There were about 1,419 new private residential units sold in Q1 2016, down by 11.5% the previous quarter but up by 8.2% a year earlier, according to the Urban Redevelopment Authority. Supply continues to fall. The number of uncompleted private residential units launched fell by about 20% to just 953 y-o-y units in Q1 2016. Singapore's economy expanded by 1.8% y-o-y in Q1 2016, at par with the previous two quarters, according to the Monetary Authority of Singapore. GDP growth is expect between 1% and 3% this year, from 2% in 2015, 3.3% in 2014, 4.7% in 2013, 3.7% in 2012, and 6.2% in 2011.

In Indonesia, residential prices in the country's 14 largest cities fell by 0.16% y-o-y in Q1 2016, from annual declines of 0.2% in Q4 2015, 1.49% in Q3 2015, 1.07% in Q2 2015, and 0.26% in Q1 2015. House prices fell slightly by 0.24% q-o-q during the latest quarter. Demand is now weakening sharply and total supply growth is expected to slow in the coming years.

In an effort to attract foreign investors, the Indonesian government unveiled last year a plan to finally allow foreigners to purchase luxury apartments in the country. Indonesia's economy grew by 4.92% y-o-y in Q1 2016, from 5.04% in Q4 2015. The economy is expected to grow by 4.9% this year, after a 4.8% expansion in 2015.

U.S. housing market remains bullish

The U.S. housing market remains strong, despite slowing economy. The S&P/Case-Shiller seasonally-adjusted national home price index rose by 4.29% during the year to Q1 2016 (inflation-adjusted), after annual rises of 4.52% in Q4 2015, 4.82% in Q3 2015, 4.3% in Q2 2015, and 4.41% in Q1 2015. House prices increased by 0.21% during the latest quarter.

This was supported by Federal Housing Finance Agency's seasonally-adjusted purchase-only U.S. house price index, which rose by 4.54% during the year to Q1 2016 (inflation-adjusted), slightly down from y-o-y increases of 5.36% in Q4 2015, 5.68% in Q3 2015, 5.62% in Q2 2015, and 5.29% in Q1 2015. The index increased by 1.24% 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 Portland registering the biggest inflation-adjusted increase of 11.34% y-o-y in Q1 2016, followed by Seattle (9.86%), Denver (8.98%), Dallas (7.58%), San Francisco (7.52%), Tampa (6.67%), Los Angeles (5.57%), Atlanta (5.51%), Miami (5.31%), and San Diego (5.25%). Washington and Chicago saw the lowest growth in house prices at 0.6% and 0.89%, respectively.

Residential construction continues to rise. New privately-owned housing units authorized rose by 3% y-o-y to 355,800 units during the first four months of 2016, according to the U.S. Census Bureau. Over the same period, the total number of housing starts rose by 10.2% to 356,100 units while completions rose by 12.2% to 293,300 units.

Demand remains strong. New house sales were up by 9% to about 195,000 units in the first four months of 2016 from the same period last year, according to the U.S. Census Bureau. There were about 239,000 units for sale by April 2016, about 17% up from a year earlier.

Homebuilders remain bullish on the housing market. U.S. home builder sentiment held steady at 58 in May 2016 for the fourth month in a row, according to the National Association of Home Builders. A reading of 50 is the midpoint between positive and negative sentiments.

Low mortgage interest rates continue to fuel property demand. The average interest rate for 5/1 hybrid adjustable rate mortgages (ARMs) remained low at 2.83% in April 2016. Over the same period, the average interest rate for 15-year fixed rate mortgages (FRMs) fell to 2.87% while the 30-year FRMs also dropped to 3.61%, according to Freddie Mac.

In the first quarter of 2016, the U.S. economy grew by an annualized rate of 0.8%, after growth rates of 1.4% in Q4 2015, 2% in Q3 2015, 3.9% in Q2 2015 and 0.6% in Q1 2015, amidst weakening exports and investment caused by strong dollar and lower oil prices, according to the U.S. Bureau of Economic Analysis. Despite this, the U.S. economy grew by 2.4% last year, matching its pace in 2014. The world's largest economy is expected to grow by another 2.4% this year and by 2.5% in 2017, according to the IMF.

Canada's housing market stronger

Despite repeated market-cooling measures, house prices in Canada's eleven major cities rose by 5.67% during the year to Q1 2016, up from 3.57% the previous year and the biggest annual increase since Q2 2010. House prices increased 0.2% q-o-q in Q1 2016.

Biggest rises: Vancouver saw the biggest inflation-adjusted house price increases of 15.8% y-o-y in Q1 2016, followed by Hamilton (9.1%), Toronto (7.7%), and Victoria (7.1%).

Biggest falls: Halifax recorded the biggest price drop of 5.8% during the year to Q1 2016, followed by Calgary (-4.9%), Quebec (-3.6%), Edmonton (-1.8%), Ottawa (-1.4%), Montreal (-1.3%), and Winnipeg (-0.1%).

Home sales rose by 10.3% in April 2016 from the same period last year, according to the Canadian Real Estate Association (CREA). Sales were up in about 70% of all local markets, led by a number of markets in British Columbia and the Greater Toronto Area. There were about 4.7 months of inventory on a national basis in April 2016, the lowest level in more than 6 years and an indication that the housing market, especially in British Columbia and Ontario, is increasingly becoming tighter.

The Bank of Canada held its key interest rate unchanged at 0.50% in May 2016, after cutting it twice last year in response to plunging oil prices and worsening economic prospects. The key rate had previously been 1% from September 2010 to December 2014.

Canada's economy grew by an annualized rate of 2.4% in Q1 2016, up from 0.5% in Q4 2015, according to Statistics Canada. Canada's economy, battered by the oil price decline, grew just 1.2% last year, less than half the 2.5% growth seen in 2014 and the slowest growth since the 2009 recession. The economy is expected to expand by 1.5% this year and by 1.9% in 2017, according to the IMF.

Middle East's housing markets continues to weaken

All four Middle Eastern housing markets included in our global survey performed worse in Q1 2016 than the previous year. Two countries had rising house prices during the year to Q1 2016, while the other two experienced sharp declines in house prices.

Qatar's property market is now weakening rapidly, though it remained the world's fifth strongest housing market in our survey. The nationwide real estate price index rose by 9.27% during the year to Q1 2016, sharply down from a y-o-y rise of 27.81% in Q1 2015. Property prices rose by 4.51% q-o-q during the latest quarter.

Property demand in Qatar remains strong in the first four months of 2016 after the value of real estate transactions reached an all-time high in 2015, boosted by sustainable economic and population growth, and a construction boom in preparation for the 2022 FIFA World Cup. The economy is expected to expand by a modest 3.4% this year, after growing by an annual average of 4.2% in 2012-15, and 15.7% in 2008-11, according to the IMF.

Israel's housing market is also softening, amidst economic slowdown. The nationwide average price of owner-occupied dwellings rose by 4.52% during the year to Q1 2016, a slowdown from a y-o-y rise of 8.5% a year ago and the lowest annual increase since Q1 2014. House prices increased 1.37% q-o-q in Q1 2016.

Demand is also waning. After a more than 40% growth in 2015, new dwelling sales increased by just 3.7% y-o-y to 8,292 units, according to the Central Bureau of Statistics (CBS). The number of new dwellings for sale increased 1.7% to 26,725 units in March 2016 from a year earlier. Dwelling starts rose by 3.9% y-o-y to 47,746 units in 2015 while dwelling completions dropped 2.8% to 43,399 units over the same period.

Israel's economy grew by an annualized rate of 0.8% in Q1 2016 from 3.1% in the previous quarter, due to weak exports caused by strong shekel. The economy is expected to expand by 2.8% this year, after growing by 2.6% for both 2014 and 2015, 3.3% in 2013, 2.9% in 2012, and 5% in 2011, according to the Bank of Israel. The Bank of Israel kept its benchmark interest rate at a record low of 0.1 in May 2016, in an effort to boost economic growth while maintaining price and financial stability.

Dubai's residential property prices plunged by 9.26% during the year to Q1 2016, worse than the annual drop of 2.72% in Q1 2015 and its fourth consecutive quarter of y-o-y declines. House prices fell by 0.33% 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 from Q3 2008 to Q3 2011 with house prices plunging by 53%. The market started to recover in 2012, with double-digit house price increases from Q2 2012 to Q4 2014. However, the property market started slow in the second half of 2014, amidst housing oversupply, subdued demand and slower economic activity.

The total number real estate transactions rose by 13.6% to 12,568 units in Q1 2016 from the previous year while the value of transactions dropped 14.1% to AED55 billion (US$15 billion), according to Dubai Land Department. Around 48,000 units are expected to be delivered into the market from 2016 to 2018, according to CBRE.

House prices in Dubai are expected to fall further by 10% this year, amidst weaker investor sentiment and weak economic growth, according to Standard & Poor's.

UAE's economic growth is projected to slow to 2.4% this year, after GDP growth of 3.9% in 2015, 4.6% in 2014, 4.3% in 2013, 7.2% in 2012 and 4.9% in 2011, according to the IMF. This is due to lower oil prices, slowing Chinese economy and looming regional public spending cuts.

Egypt's property market remains depressed with the nationwide real estate index plunging by 9.49% during the year to Q1 2016. This is in sharp contrast with the rise of 2.07% in Q1 2015. Despite this, house prices rose by 12.21% q-o-q during the latest quarter.

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 grew by 4.2% in 2015, the highest growth in 5 years, 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. Economic growth is projected to slow to 3.3% this year, according to the World Bank, amidst foreign currency shortages and a weakening tourism sector following the downing of a Russian plane in October 2015.

New Zealand's housing market slowing sharply

New Zealand's housing market is slowing sharply, amidst weakening economic growth. The nationwide median house prices rose by 3.63% during the year to Q1 2016, a sharp slowdown from a y-o-y rise of 7.85% in the same period last year. Despite this, house prices rose by 6.25% q-o-q during Q1 2016.

Total dwellings sold were 8,568 units in April 2016, down by 10.1% from the previous month but up by 18.4% from a year earlier, according to the Real Estate Institute of New Zealand (REINZ). All ten regions recorded increases in sales volumes in an annual basis, with Hawke's Bay registering the biggest y-o-y rise of 50% in April 2016, followed by Southland (49%), and Otago (35%). New dwelling consents rose by 11.6% to 8,750 units in the first four months of 2016 from the same period last year, according to Statistics New Zealand. Likewise, the number of residential building permits also increased 15.7% to 11,230 units over the same period.

New Zealand's economy is projected to expand by just 2% this year, after growing by 3.4% in 2015, 3% in 2014, 1.7% in 2013, 2.8% in 2012, 1.8% in 2011 and 2% in 2010, according to the IMF. The Reserve Bank of New Zealand (RBNZ) kept its official cash rate (OCR) at 2.25% in April 2016, after cutting it five times in the past ten months, in an effort to boost economic growth amidst low inflation.

Brazil's housing market deteriorating; Mexico stronger

Brazil's housing market outlook remains gloomy, amidst the ongoing economic and political crisis. In Sao Paulo, house prices fell by 7.59% during the year to Q1 2016, its fifth consecutive quarter of falling house prices. Quarter-on-quarter, house prices dropped 2.37% in Q1 2016.

Brazil's economy remains in deep recession and its currency is plummeting. The economy shrank by 5.4% in Q1 2016 from a year earlier, after annual declines of 5.9% in Q4 2015, 4.5% in Q3 2015, 3% in Q2 2015, 2% in Q1 2015, 0.7% in Q4 2014, 1.1% in Q3 2014, and 0.8% in Q2 2014 - the country's worst and longest recession in more than a century. Worse, the country is in the midst of immense political turmoil. In May 2016, President Dilma Rousseff was temporarily suspended by a congressional impeachment vote, amidst the massive Petrobras corruption scandal. Vice President Michel Temer has taken over as interim president. Consumer and investor confidence continue to decline. In May 2016, Fitch Ratings has downgraded Brazil's sovereign rating into junk, in line with the other two major rating companies.

The economy is expected to contract by 3.5% this year, after a contraction of 3.8% in 2015, and growth rates of 0.15% in 2014, 2.7% in 2013, 1.8% in 2012, 3.9% in 2011 and 7.6% in 2010, according to the Banco Central do Brasil. By December 2015, the Brazilian Real (BRL) had lost about 32% of its value against the U.S. dollar to reach an average monthly exchange rate of BRL3.8828 = USD1 as compared to BR2.6426 = USD1 in December 2014. However in the first five months of 2016, the real recovered by almost 10% to reach an exchange rate of BRL3.5416 = USD1, as the economy shrinks less than expected.

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.

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 2015, the central bank again raised the key rate five times to 14.25%, the highest level for almost six years. The key rate remained unchanged since.

Mexico's housing market continues to grow stronger, buoyed by strong demand in resort communities and a sustainable economic growth. The nationwide house price index rose by 5.26% y-o-y in Q1 2016, an improvement from an annual rise of 1.73% in the same period last year. However on a quarterly basis, house prices dropped 1.57% in Q1 2016.

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. In 2015, Mexico's peso slumped against the US dollar by about 15%, the biggest annual decline sine 2008. In the five months to May 2016, the peso depreciated further by around 6%, at an exchange rate of MXN18.138 = USD1.

The Mexican economy grew by 2.5% last year, after 2.3% in 2014, 1.3% in 2013, 4% in both 2011 and 2012, and 5.1% in 2011. Mexico is now considered as one of Latin America's star performers, with a projected average annual GDP growth rate of 3.7% in 2016 to 2019.

South Africa's housing market set to slide further

South Africa's price index for medium-sized apartments fell by 1.3% during the year to Q1 2016, in contrast to the annual increase of 1.52% the previous year. House prices dropped 2.18% q-o-q in Q1 2016.

House prices are expected to continue falling in the remaining months of 2016, amidst weakening rand, falling foreign investor confidence, and uncertain economic condition, according to local property experts.

South Africa's economy grew by about 1.3% last year, its slowest growth since the country emerged from a recession 2009. The economy is expected to slow further, with real GDP growth estimated at 0.6% this year, amidst severe drought and declining exports, according to IMF.

The South African Reserve Bank (SARB), the country's central bank, held its benchmark repurchase rate at 7% in May 2016, after raising it by a cumulative 75 basis points in the first four months of this year, in an effort to stop the rand from depreciating further and to contain inflationary pressures. In May 2016, the rand lost about 22% of its value from a year earlier, partly caused by a weak economy and the sudden reshuffling of the finance ministry. The exchange rate stood at ZAR15.2952 = USD1 in May 2016. The rand is expected to remain under pressure in the coming months.

References:
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