Daily Management Review

Prices growth in the global real estate market: Winners and losers of 2017


03/09/2018


Global Property Guide portal published a study on the changes in property prices in 45 countries in 2017. Who was ahead of others, and who became an outsider?



Dan Moyle via flickr
Dan Moyle via flickr
Europe

The Old World was the strongest market in 2017. Three of the five countries that showed the maximum price increase in the past year are located right here.

Iceland

Iceland is the leader of the world rating. Prices for housing in this country are climbing up thanks to the growth in demand for real estate, fueled by a tourist boom. For 2017, the cost of houses and apartments here rose by 12.88%. This is the highest rate since 2005. Nevertheless, prices in Iceland decreased by 1.11% in the quarterly calculation from October to December 2017. According to the Tourism Bureau of this country, in 2017 the number of foreign visitors jumped by 24.2% to 2.2 million. In 2018, GDP growth is expected to be 3.2%, in 2017 this figure was 3.4%, in 2016-m - 7.2%, in 2015-4.1%.

Ireland

The country took the second place in the ranking of price increases among European countries. Ireland is third in the general list, immediately after Hong Kong. Local housing prices have grown by 11.92% in 2017. The reason is a stable economy supported by a high demand for real estate combined with a supply shortage. The country's GDP grew by 7.3% last year and is expected to increase by 4.4% in 2018.

Montenegro

In a similar study for 2016, this Balkan country showed the worst results, being the weakest market. But in 2017 new buildings here have risen in price by 8.59%. Over the past year, the country's GDP grew by 3.9% and it is expected that it will rise by another 3% this year.

Netherlands

The Dutch housing sector continues to strengthen. For 2017 the cost of houses and apartments here has added 6.73%. This is more than 4.73% in 2016 and is the strongest growth in 17 years. Over the past year, home sales in this country jumped by 13%, thanks to low interest rates and the rapid development of the economy. In 2017, the GDP of the Netherlands increased by 3.1% - the strongest since 2007. In 2018, the local economy is expected to grow by 2.9%, and in 2019 - by 2.5%, according to the European Commission.

Countries with a more modest rise in house prices in 2017 were: Latvia (Riga) - 6.47%, Sweden - 6.11%, Romania (5.92%), Germany (4.45%), Spain (3.32% %), Portugal (3.03%), France (2.75%) and Slovakia (2.43%). Weak positive dynamics was recorded in Finland (0.92%) and Macedonia (0.87%).

The weakest European markets were Ukraine (-7.97%) and Russia (-5.48%). A small drop occurred in Austria (Vienna) (-1.84%), Switzerland (-1.7%), Greece (-1.09%), Norway (-0.6%), Lithuania (-0.33%) and Great Britain (-0.08%).

Asia Pacific area

Hong Kong

For 2017, the cost of residential property in the city-state soared by 12.81%. This is significantly more than 6.61% in 2016, 0.11% in 2015, 8.22% in 2014 and 3.3% in 2013. The government has not managed to cool the hot market, despite the increase in stamp duty for buyers of second homes in 2016 and the tightening of mortgage lending rules in 2017. Over the past year, the number of real estate transactions in Hong Kong has increased by 12.6%, and the total volume of transactions - by 30%. In 2017, the country's GDP rose by 3.7%, in 2018 it is projected to grow by 2.7-3%.

Macao

The special administrative region of the PRC has become one of the strongest markets due to investments in infrastructure projects. The average cost of housing here increased by 9.24% in 2017 and by 5.49% only for the last quarter of 2017. GDP growth was 8% last year, but this year it should slow down to 5%.

Philippines

This country is in the catbird seat the seventh year in a row thanks to the strong growth of the economy. For 2017, housing here has risen in price by 5.95%. The country’s GDP grew by 6.7%. As it is expected that in 2018 it will increase by an additional 6.7%, it can be predicted that this market will remain one of the fastest growing in Asia.

New Zealand

Due to tightening credit conditions and deteriorating accessibility, the country's housing sector has slowed sharply. In 2017, houses and apartments here grew by only 4.92%, while in 2016 this indicator was 9.47%. The country's GDP this year is projected to increase by only 3.1%, and last year it was 3.5%.

Japan

Due to the slowing demand, the local market also significantly weakened. For 2017, housing here went up by 4.92%, while in 2016 the growth was 9.47%. It is expected that the country's GDP will grow by 3.1% in 2018, and this is less than 3.5% in 2017.

The weakest Asian markets are China (-1.94%) and Mongolia (-5.61%).

Middle East

The real estate market in the region is going through hard times. This is not surprising, given the low oil prices and the ongoing political and diplomatic crisis.

Egypt

The weakest market in the entire rating for 2017. Housing prices here for the year fell by 11.49%. On a quarterly basis, the decline was 7.38%.

Qatar

The housing sector of the country remains under the influence of the economic and diplomatic crisis. Apartments and houses fell in price in 2017 by 10.43%. And for the last quarter of 2017, the decline was 1.58%.

Dubai

The average cost of residential property in the emirate declined by 5.23% in 2017, due to weak economic growth, a decreased interest from investors and a glut of the market supply.

Israel

The boom in the local real estate market is over. The government has stepped up the cooling market measures. As a result, in 2017 local housing has fallen in price by 3.33%.

America

USA

For five consecutive years, the US housing sector has been developing rapidly. House prices increased in 2017 by 4.07%. Demand and construction activity continue to grow. In 2017, the country's GDP rose by 2.3%.

Canada

Houses and apartments in seven largest cities of the country went up by 7.07% in 2017. The Real Estate Association of Canada (CREA) predicts a decline in sales this year at 5.3%. In 2017, the country's GDP grew by 3%, which is the highest since 2011. This year, the economy is expected to grow by 2.2%.

Chile

The local real estate market continues to grow, despite the introduction of a new tax on the sale of property in 2016. New buildings in the Greater Santiago went up for 2017-1 by 6.69%.

The weakest American markets were Mexico (+ 0.73%) and Brazil (-1.5%).

source: globalpropertyguide.com






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