Global House Price Index

The global housing boom appears now to be losing momentum, with most of the Middle East, Latin America, New Zealand and some parts of Asia experiencing either house price falls or a deceleration of house price rises. However, Europe, Hong Kong and Canada continue to experience strong price rises.

The five strongest housing markets in our global house price survey for the second quarter of 2017 were: Iceland (+21.28%), Hong Kong (+19.27%), Ireland (+13.52%), Canada (+13.08%), and Romania (+8.87%). During the second quarter of 2017 house prices rose in 28 out of the 43 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 33 countries, and declines in 10 countries.

Global house price index

Momentum. During Q2 2017, only 16 of the world’s housing markets for which figures are available showed stronger upward momentum, while 26 housing markets showed weaker momentum, according to Global Property Guide’s research. House prices continue to rise in most of Europe but the momentum is weaker. Six of the ten strongest housing markets in our global survey are in Europe and house prices have risen in 18 of the 22 European housing markets for which figures were available during the year to Q2 2017. However, only 10 European housing markets showed stronger upward momentum during Q2 2017, while the 12 markets showed weaker momentum.

Source: Global Property Guide

According to the Economist’s Global House Price Index, 21 out of 26 markets have risen significantly with a median pace of approximately 4.7% a year. China’s housing market is one of only five countries in the ECONOMIST’s index where prices are falling, joining Singapore and a trio of euro-zone countries—France, Greece and Italy. The government has been trying to boost the market over the past ten months which is now slowly responding.

To assess whether house prices are at sustainable levels, ECONOMIST use two yardsticks. One is affordability, measured by the ratio of prices to income per person after tax. The other is the case for investing in housing, based on the ratio of house prices to rents, much as stock market investors look at the ratio of equity prices to earnings. If these gauges are higher than their historical averages then property is deemed overvalued; if they are lower, it is undervalued. According to their analysis results, property is more than 30% overvalued in six markets, notably in Australia, Britain and Canada.

This interactive chart uses five different measures
• House-price index: rebased to 100 at a selected date
• Prices in real terms: rebased to 100 for the selected date and deflated by consumer prices
• Prices against average income: compares house prices against average disposable income per person, where 100 is equal to the long-run average of the relationship
• Prices against rents: compares house prices against housing rents, where 100 is equal to the long-run average of the relationship
• Percentage change: the percentage change in real house prices between two selected dates

The data presented are quarterly, often aggregated from monthly indices. When comparing data across countries, the interactive chart will only display the range of dates available for all the countries selected

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