Global price index developed by Knight Frank residential real estate - the results of the 1 st quarter of 2010
The most notable trend of development of international real estate markets is their clear division into groups according to geographical origin. The first four positions in our ranking are occupied by countries in the Asia-Pacific Region (APR), whereas the representatives of Europe dominate the bottom of the table.
Restoration of global real estate markets at the moment is quite perceptible. If in the first quarter of 2009, only 33% of countries have shown positive dynamics, the 1 st quarter of 2010 this figure reached 53%. However, up to 90% recorded in the 1 st quarter of 2006, still far away.
Analysis of the quarter shows that the Baltic countries and Ukraine, which showed worse dynamics, the pace of falling prices and slowing. For example, in Estonia, house prices fell by 40% for the year, but the first three months of this year's decline in prices was only 0.5%.
Prices for residential property in Hong Kong for the year grew by 30.6%. We expect some slowdown in housing prices that would result from the government measures to chilling overheated real estate market. These measures include increasing the supply of building land, limiting the maximum amount of mortgage loans 60% of the value of the home, as well as a mandatory requirement for developers to be placed on sale for at least 30% of total supply in the initial phase of construction to stop the artificial delay exit sites to the market, which "accelerates" the price for the entire construction process.
In Australia at the end of the 1 st quarter of 2010 prices rose for the year by 20%, in line with data Australian Bureau of Statistics (ABS). However, in our opinion, the ABS data overestimate the actual current price increases in connection with the uniqueness of the methodology employed and seasonal irregular business activity. Historically, the deviation index is fixed and the lower and upper boundaries, as in this case - according to other sources, the basis of which adopts a more general methodology that takes into account the dynamics of prices for apartments and townhouses (not the same as ABS), annual growth in house prices in Australia at the end of the 1 st quarter of 2010 was 12%. However, this figure represents a fairly significant growth that is attributable to several factors: low interest rates (minimum 40 years), benefits from the primary home buyers (ie those who have newly acquired housing), population growth and inadequate volume of proposals. At a time when interest rates began to rise, the government limits the incentives, and the supply increases, we expect that growth in house prices in Australia over the next six months will slow down.
Doubts about the methodology used in Australia are also reflected in the Spanish statistics, where, according to the Ministry of housing, prices for the year fell by 4.7% at the end of the 1 st quarter of 2010. Many reputable experts believe that the fall in house prices in Spain have been more substantial - a figure of 10-20% would more accurately reflect the situation in the real estate market due to the difficult economic situation in the country, a 20% unemployment and increasing national debt.
In Europe, the positive picture is observed in Scandinavia. In Norway, Sweden and Finland, the annual growth in house prices has exceeded 10% - housing markets in these countries are less burdened by the weakness of the currency and debt crisis in comparison with markets in most neighboring countries and the limited supply provoked an increase in prices.
In general, although the results of the 1 st quarter of 2010 show that the global housing market is diametrically divided, each new quarter demonstrates the global recovery, as the countries included in the growth zone, it becomes more and more. It remains to verify that this recovery is a phase of sustained growth, rather than the peak value of W-shaped recession. For some European countries are experiencing serious economic difficulties, tightening fiscal policy and introducing strict measures aimed at saving the budget.
With regard to the Ukrainian market of housing, the last six months, he demonstrates an enviable stability and even a small increase. "Declining prices in 2009, as well as the completion of a number of facilities of business and elite class, the number of transactions in the segments with the beginning of 2010 monthly increases. Amid growing interest in housing is already posted an increase in average prices, as in the elite segment, and in business class. Despite the observed stabilization of the market, expect further upward price trend is premature. In the short-term market development will largely depend on the overall economic situation and the resumption of lending programs for the construction industry, "- commented General Director of Knight Frank LLC Ukraine Yaroslava Chapko.