Posted by admin on Jun 4, 2010 in Articles | 0 comments
Eurozone slows, but Asia-Pacific house prices surge
The global house price boom continues in 2007, albeit at a much slower pace and with different set of countries, according to the online research house, the Global Property Guide (http://www.globalpropertyguide.com).
A dramatic slowdown has taken place in several countries in Europe. House prices in Estonia, 2005 and 2006’s star performer, rose only 5.68% y-o-y to Q1 2007, dramatically lower than the 77.52% y-o-y increase to Q1 2006.
Higher interest rates and an overheating market were the main causes of the slowdown. The key interest rate of the European Central Bank (ECB) has been raised nine times to 4% in June 2007, from its historic low of 2% in Nov 2006.
Other European countries that experienced lower house price changes y-o-y to Q1 2007 than in 2006 included France, Sweden, Ireland, Spain, Greece, the Netherlands, Switzerland and Portugal.
Ireland’s annual house price growth slowed to 7.44% y-o-y to Q1 2007, a deceleration from 12.07% y-o-y to Q1 2006. Apart from the higher interest rate, the heating issue on Stamp Duty also contributed to the decline.
The US house price rise also slowed to 4.07% y-o-y to Q1 2007, down from 12.78% y-o-y to Q1 2006.
The US Federal Funds rate has risen sharply from its low of 1% in May 2004 to its current
level of 5.25%. The Fed has kept the rate unchanged since June 2006. This rate increase has meant trouble for sub-prime borrowers, leading to delayed payments and foreclosures.
Strong rises in non-Eurozone Europe
Interestingly, European countries which have not adopted the Euro have experienced stronger house price rises y-o-y to Q1 2007, than countries within the zone. Such is the case of Latvia which plans to adopt the Euro in 2010. Latvia took the lead in house price increases y-o-y to Q1 2007.
Latvia’s capital, Riga, experienced a remarkable appreciation of 61.91% y-o-y to Q1 2007, higher than the 35.64% y-o-y increase to Q1 2006. However, recent data from Latio, Latvia’s leading research-oriented real estate agency, show that prices have started to fall in Q2 2007.
Lithuania’s house prices rose by 26.32% y-o-y to Q1 2007, up from 25% y-o-y to Q1 2006. Lithuania has recently increased its long-term interest rate to 4.6% in June 2007, from 4.2% in March 2007. The European Commission rejected Lithuania’s bid to adopt the euro in 2007 because its inflation breached the required limit.
House prices in Norway were up by 16.69% y-o-y to Q1 2007. Norway rejected EU membership in a referendum in 1972, and again in 1994. Positive factors such as continued economic expansion and the strength of the labour market overpowered the pull exerted by higher interest rates.
After taking a breather in 2005 and early 2006, house price growth in the UK accelerated to 9.25% y-o-y to Q1 2007, up from 5.3% y-o-y to Q1 2006. Particularly, Northern Ireland and London saw double-digit y-o-y house price increases in Q1 2007, at 57.6% and 14.3%, respectively.
Cyprus, which is set to adopt the Euro starting January 2008, is in a middle of a housing boom with house prices rising by almost 10% y-o-y to Q1 2007. Liberalization of the financial sector, a decrease in interest rates, and increased demand for higher quality housing and second homes were the main drivers for the price boom.
Now it’s Asia–Pacific’s turn
The house price boom is now moving towards the Asia-Pacific region. Property prices in countries affected by the Asian Crisis are showing strong signs of recovery, prompting fears that a property bubble is developing anew in the region.
Property prices in the Philippines, Singapore and South Korea rose by more than 10% y-o-y to Q1 2007, higher than in 2006. Although Japan registered a nationwide land price drop of 1.48%, land prices in its six major cities increased by a remarkable 7.75% y-o-y to Q1 2007, suggesting a real recovery from the 15-year house price downturn. There are no official house price statistics in Japan, so land prices are used as a proxy.
Australia has recovered from its 2004-2006 slowdown. Despite higher interest rates, house prices rose by almost 8% y-o-y to Q1 2007, from 4% y-o-y to Q1 2006.
New Zealand’s house prices rose by 11.36% y-o-y to Q1 2007, significantly up from 9.55% y-o-y to Q4 2006. This is despite the fact that the Reserve Bank of New Zealand (RBNZ) has increased interest rates since early 2004 to cool down the housing market.
Elsewhere, South Africa saw 16.74% house price increases y-o-y to Q1 2007. South Africa’s house prices have been escalating for seven continuous years, with price increases peaking at 30% in 2004.
Canada’s house prices moved forward in Q1 2007, thanks to strong economic growth, low mortgage rates and large net immigration. House prices rose 9.30% y-o-y to Q1 2007, up from 7.55% y-o-y to Q1 2006.
The laggards
Thailand and Israel, after suffering from political crises, have not yet recouped the confidence of investors. This resulted in a drop of 5.09% y-o-y to Q1 2007 in Thailand’s house prices, down from an 8.03% y-o-y increase to Q1 2006. Israel’s house prices fell by 10.52% y-o-y to Q1 2007, due to increased political and security concerns in the Middle East.
Portugal’s sluggish economic expansion exacerbated the effect of higher Euro interest rates. House prices have risen by a meager 1.14% y-o-y to Q1 2007, after an already low growth rate of 2.17% y-o-y to Q1 2006.
Full Report:
http://www.globalpropertyguide.com/articleread.php?article_id=94&cid=
Economics Team:
Prince Christian Cruz, Senior Economist
Phone: (+632) 750 0560
Email: prince@globalpropertyguide.com />
Publisher and Strategist:
Matthew Montagu-Pollock
Phone: (+632) 867 4220
Cell: (+63) 917 321 7073
Email: editor@globalpropertyguide.com />
Address:
Global Property Guide
www.globalpropertyguide.com />
5F Electra House Building
115-117 Esteban Street
Legaspi Village, Makati City
Philippines 1229
info@globalpropertyguide.com />
Description:
The Global Property Guide is an on-line property research house.
Terms of Use:
On-line newspapers, magazines, etc wishing to use material from this press release MUST provide a clickable link to www.globalpropertyguide.com.
The Global Property Guide is an on-line property research house.
On-line newspapers, magazines, etc wishing to use material from this press release MUST provide a clickable link to www.globalpropertyguide.com.
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Posted by admin on May 28, 2010 in Global Constitution | 0 comments
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Welcome to Global Constitution. The world needs a constitution in order to build concensus on areas of concern for all people. In no order, here are the major areas which most peoples can agree to…
* Equal rights for all, implying the institution of a global redistribution process
* Eradication of poverty in all countries
* Sustainable development on a global scale
* Fight against the roots of terrorism and crime
* Consistent, effective, and fully democratic international institutions
* A controlled legally-based economy focused on stability, growth, full employment, and North-South convergence
Thank you for visiting GlobalConstitution.org. 
Global Constitution provides videos, articles, and conversation about thinking about the forest rather than just the trees – about another level of governance above the nation state, primarily because of the challenges, opportunities, and dangers on the global scale which can not be effectively managed by nation states.
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Posted by admin on May 23, 2010 in Articles | 0 comments
The Global Property Guide today re-launched its web site to make its data more accessible. The home page has been simplified. Major categories have been spelled out. The new Home Page has been organized around an expanded menu, to help the reader navigate the site. Key data items are easier to find, more obvious.
The Global Property Guide
The Global Property Guide is the authoritative source of information on buying residential property. It covers every investible country in the world, from the perspective of income, tax, and capital gains. We provide research and information on 131 countries to residential property investors, with brief information on 85 countries.
Property, as an asset class, is highly susceptible to booms and busts. Across the Western world major countries have experienced a prolonged residential property boom.
Like stock prices (but with markedly different dynamics) residential property prices are now coming back down to earth. We help investors make sense of these swings by providing tools of analysis, and displaying data in a clear, comprehensive and accurate format.
Our fundamental residential property market data includes
• Price change 1 year
• Price change 5 year
• Price change 10 year
• Square metre price city centre
• Total round-trip transaction cost
• Gross yield
• Price to rent (P/R) ratio
• Price to Gross Domestic Product
• Change in interest rates
• Taxes on income (effective rates)
• Capital gains tax (effective)
• Inheritance taxes (effective)
• Buying process (graded by quality)
• Tenant legislation (graded as landlord-friendly)
• Residence (high tax / low tax)
• Economic growth
• Competitiveness
• GDP per capita
• Competitiveness rank, improvement over 5 years
• Stage of economic cycle
“Our aim is to be the Bloomberg of international residential property,” says publisher Matthew Montagu-Pollock, referring to the financial site on trading desks around the world (www.bloomberg.com/). “Bloomberg provides data – but also makes it easy to use.”
“It’s important for a residential investor be able to see what his likely return on investment will be. What his taxes will be. To be able quickly to check whether the laws are landlord-friendly. To survey the inheritance laws. All this is now available, for almost every country in the world, on our site, without any marketing material or any attempt to sell you anything – just the facts.”
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Description:
The Global Property Guide is an on-line property research house.
Publisher:
Matthew Montagu-Pollock Phone: (+632) 867 4220 Mobile: (+63) 917 321 7073
Email: editor@globalpropertyguide.com />
Address:
Global Property Guide
www.globalpropertyguide.com
5F Electra House Building
115-117 Esteban Street
Legaspi Village, Makati City
Philippines 1229
info@globalpropertyguide.com />
The [b]Global Property Guide[/b] is a research publication and web site for the high net worth investor in residential property – providing information about the process and benefits of buying property in any country in the entire world.
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Posted by admin on May 17, 2010 in Articles | 0 comments
Weighed down by the credit crunch and high inflation, the global house price boom has ended, according to the latest Global Property Guide survey of house price indicators.
Only 13 countries in which dwelling price indices are regularly published saw prices rise during the year to end Q1 2008, while 21 countries saw dwelling prices fall in real terms, i.e., after adjusting for inflation.
In most countries where house prices are not falling, they are clearly losing momentum.
The biggest house price fall was in Latvia (Riga), down -38.2% by May 2008 from a year earlier, after adjusting for inflation.
US prices also fell during the year to end of Q1, by anything from -4.2% to
-18.1%, after inflation, depending on which index is used.
In Europe, significant real house price falls took place during the year to end-Q1 2008 in Ireland (- 13.2%), Luxembourg (-5.8%), Portugal (-4.3%) and Malta (-4.9%).
UK house prices were only slightly down at end-Q1 from a year earlier, the house price crash having begun in earnest in early 2008. House prices fell during the first quarter by between – 0.7% to -2.1% (inflation-adjusted), depending on the index used.
In Japan, the housing market is now losing momentum once again. The urban land price index for 6 major cities was up only 4.1% year-on-year (y-o-y) to H1 2008 in nominal terms (2.9% after inflation), down from 7.8% over the same period in 2007 (7.9% after inflation). The national index for Japan fell by 0.7% y-o-y to H1 2008 (-1.9% after inflation).
Inflation woes
In nominal terms, 28 countries saw their housing prices rise during the year to end-Q1 2008, while only 6 saw prices fall.
However when property prices are adjusted for inflation, the picture looks entirely different. Skyrocketing oil, food and commodity prices have pushed inflation up around the world.
In Ukraine for instance, nominal house price growth was sharply down from 79.5% in the year to Q1 2007, to 18.2% in the year to Q1 2008. But when adjusted for inflation, property prices actually fell by -6.4% y-o-y.
In real terms, property prices fell y-o-y to end-Q1 2008 in Norway, Spain, Greece, South Korea, New Zealand, Indonesia, South Africa, Israel, Estonia and Lithuania, despite nominal price rises in all these countries.
House-price booms elsewhere
On the other hand, strong house prices increases were observed in a handful of emerging economies. Ahead of the pack was China (Shanghai), with an enormous 40.5% nominal house price surge during the year to the end of Q1 2008.
Other countries with impressive nominal house price increases y-o-y to end-Q1 2008 were Bulgaria (31.6% y-o-y), Hong Kong (31.1% y-o-y), and Singapore (29.8% y-o-y). Strong house price gains also took place in Cyprus, Australia and Taiwan.
Again, when adjusted for inflation, many of these price rises look much less impressive. The world’s top-performing housing market (after inflation) was not China or Hong Kong or Singapore, but Slovakia, where real house prices rose by 29.3%.
Causes of the downturn
There were arguably three main factors behind the end of the housing boom:
· After a very long boom, house prices had become stretched in many countries. The main indicator of this is the price/rent ratio, which compares the relationship between the buying price of a dwelling, with its rental price.
As the boom progressed, buying prices become high (in relation to rents and financing costs) in many countries, leading to decisions by some buyers to rent instead of buying. Mortgage-holders also came under extreme pressure as interest rates rose. A key lesson is the critical importance of monitoring price/rent ratios, to ensure that house prices valuations stay within reasonable limits. (Declaration of interest: The Global Property Guide produces comprehensive price/rent ratio estimates, globally).
· Inflationary pressures forced central banks to raise interest rates. This particularly impacted European countries where mortgage loans were primarily made on variable interest rate terms. Countries with heavily indebted households are also vulnerable when interest rates increase.
In developing countries, the overall economy (which strongly sways the mood of the housing market) is sometimes very sensitive to interest rate changes or to direct intervention by the monetary authorities. In some countries, mere threats of interest rate hikes are enough to shake the stock market and scare away foreign investors. But conversely, developing countries typically have smaller mortgage markets, reducing the impact on housing markets.
· Unsound regulatory and banking practices in the US and elsewhere led to over-lending by mortgage providers which, when these unsound loans began to go bad, caused a financial crisis. The bad news spread both by a panic contagion effect, and because many banks outside the US turned out to be more exposed than initially expected.
Prospects
Inflation remains an extremely challenging problem for the world’s central banks. In addition, the financial shocks to the world’s banking systems resulting from house price falls remain to be worked through (historically, most banking system collapses around the world have been caused by falling house prices).
Until these financial systems feel more confident that their problems are behind them, loan volumes are likely to fall. Therefore, it seems likely that the world’s house price momentum will continue to go down.
Description:
The Global Property Guide is an on-line property research house.
Terms of Use:
On-line newspapers, magazines, sites, etc wishing to use material from this press release MUST provide a clickable link to www.globalpropertyguide.com Sites and newspapers found not to be providing a link to us will be removed from our press list.
Requests for Comments:
Requests for comments are best made by telephone to +(63) 917 321 7073. UK-based callers should telephone before lunchtime. Our local time is Hong Kong time, i.e., standard time + 8.00
Economics Team:
Prince Christian Cruz, Senior Economist
Phone: (+632) 750 0560
Cell: (+63) 917 735 2228
Email: prince@globalpropertyguide.com
Publisher and Strategist:
Matthew Montagu-Pollock Phone: (+632) 867 4220 Cell: (+63) 917 321 7073
Email: editor@globalpropertyguide.com
The Global Property Guide is a research publication and web site for the high net worth investor in residential property – providing information about the process and benefits of buying property in any country in the entire world.
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Posted by admin on May 11, 2010 in Articles | 0 comments
Santiago and Concepción are attractive for residential property investors, Viña Del Mar less so, says the Global Property Guide
There are surprisingly large differences between returns on residential property in Chile’s main cities. The Global Property Guide (http://www.globalpropertyguide.com), the research site for residential property, released today the results of research into rentals in major cities of Chile. It revealed that:
• Apartments in prime areas of Santiago have excellent average rental yields of 8.16%.
• Apartments in the city of Viña Del Mar yield only half as much, on average, with gross rental yields of around 4.31% only.
The rental yield is the annual rental income on a property, as a percentage of today’s property purchase price. This is what a landlord can expect as return to his investment. The rental yield is one useful yardstick of whether property is over-valued or under-valued
The high yields on apartments in prime areas of Santiago – Las Condes, Providencia, and Vitacura – suggest that these Santiago areas make good residential property investments.
Apartments in prime areas of Santiago cost on average US$ 98,520 for a 60 square meter apartment, according to the Global Property Guide’s research, versus US$ 87,480 for the same sized property in Viña Del Mar. However, 120 square meter apartments are more expensive in Viña Del Mar than in Santiago.
The result? Looking across the different sizes, prices in the two cities are more or less the same, on average.
Though apartments in Santiago and Viña del Mar cost around the same, per square meter, yet Santiago apartments produce twice as good rental returns – i.e., rents for the same sized apartment in Santiago are nearly twice as high. This means that Santiago is much more attractive as a residential investment.
In the southern city of Concepción, 120 square meter apartments have excellent gross rental yields of 9.04% – also, an excellent level of rental yields, making Concepción a very attractive investment.
Why consider rental yields? Some investors in residential property may ignore rental returns, being more concerned with capital gains.
Yet even they would do well to consider rental yields. The rental yield, or price/rent ratio, is similar to the price/earnings ratio in the stock market. As in the stock market, property investments with high rental yields tend to perform better, and have higher capital gains, in the long-term.
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Extensive Report - http://www.globalpropertyguide.com/Latin-America/Chile/Rental-Yields
Description:
The Global Property Guide is an on-line property research house.
Terms of Use:
On-line newspapers, magazines, sites, etc wishing to use material from this press release MUST provide a clickable link to www.globalpropertyguide.com. Sites and newspapers found not to be providing a link to us will be removed from our press list.
Publisher and Strategist:
Matthew Montagu-Pollock
Phone: (+632) 867 4220
Cell: (+63) 917 321 7073
Email: editor@globalpropertyguide.com />
Address:
Global Property Guide
http://www.globalpropertyguide.com
5F Electra House Building
115-117 Esteban Street
Legaspi Village, Makati City
Philippines 1229
info@globalpropertyguide.com
The Global Property Guide is a research publication and web site for the high net worth investor in residential property – providing information about the process and benefits of buying property in any country in the entire world.
Want to Live an Extra 10 Years?
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