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GLOBAL HOUSING WATCH
Q1 2017
The IMFs Global House Price Indexan average of real house prices across 57 countries
continued to climb up in the third quarter of 2016 (Figure 1). This is the sixteenth
consecutive quarter of positive year-on-year growth in the index.
Figure 1 and 2
100
110
120
130
140
150
160
2000q1 2005q3 2011q1 2016q3
Sources: Bank of International Settlements, European Central Bank, Federal Reserve
Bank of Dallas, Savills, and national sources
Figure 1: Global House Price Index
60
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80
90
100
110
120
130
140
2000q1 2008q2 2016q3
Figure 2: Real House Price Index2010Q1=100
Gloom
Bust and Boom
Boom
Source: Bank for International Settlements, European Central Bank, Federal Reserve Bank of Dallas,
Savills, and national sources
Gloom = Brazil, China, Croatia, Cyprus, Finland, France, Greece, Italy, Macedonia, Morocco,
Netherlands, Poland, Russia, Serbia, Singapore, Slovenia, Spain, Ukraine. Bust and boom = Bulgaria, Denmark, Estonia, Germany, Hungary, Iceland, Indonesia, Ireland, Japan, Latvia, Lithuania, Malta,
New Zealand, Portugal, South Africa, Thailand, United Kingdom, United States. Boom = Australia, Austria, Belgium, Canada, Chile, Colombia, Czech Republic, Hong Kong SAR, India, Israel, Kazakhstan,
Korea, Malaysia, Mexico, Norw ay, Peru, Philippines, Slovak Republic, Sw eden, Sw itzerland, Taiwan.
2
However, house prices are not rising everywhere around the world. As noted in our Q4 2016
Quarterly Update, Figure 2 shows that developments in the countries that make up the index
fall into three clusters: gloom, bust and boom, and boom.1
In addition, house prices are also not climbing up everywhere within countries. Figure 3
shows that in many countries, house prices are subdued at the national level compared to the
city level.
Figure 3
1 See Wall Street Journal story: Why It Isnt Yet Time to Worry as Global House Prices Rise
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-10
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Chin
aN
eth
erlan
ds
Bra
zil
Russi
aS
loven
iaF
inla
nd
Spa
inM
ace
don
iaF
rance
Sin
gap
ore
Cyp
rus
Gre
ece
Cro
atia
United
Kin
gdo
mH
ung
ary
United
Sta
tes
New
Zeala
nd
Ire
land
Denm
ark
Japa
nE
sto
nia
Sou
th A
fric
aLa
tvia
Ind
one
sia
Port
uga
lIc
ela
nd
Norw
ay
Cana
da
Belg
ium
Chile
Ma
laysi
aS
wede
nS
witz
erl
and
Hong
Ko
ng
Isra
el
Austr
alia
Me
xico
Kore
aIn
dia
Slo
vak R
epu
blic
Colo
mbia
Austr
iaT
aiw
an
Gloom Bust and Boom Boom
Figure 3: Real House Price Growth: Difference Between National vs. Major CityHouse price growth since 2013, in percent
Source: Bank of International Settlements, European Central Bank, Federal Reserve Bank of Dallas, Knight Frank Research, Savills, and national sources, and author's calculations.
Countries and cities included:--Gloom = Brazil: Rio de Janeiro, China: Shanghai, Croatia: Zagreb, Cyprus: Nicosia, Finland: Helsinki, France: Paris, Greece: Athens, Macedonia: Skopje, Netherlands: Amsterdam, Russia: Moscow, Singapore: Singapore, Slovenia: Ljubljana, and Spain: Madrid.--Bust and Boom = Denmark: Copenhagen, Estonia: Tallinn, Hungary: Budapest, Iceland: Reykjavik, Indonesia: Jakarta, Ireland: Dublin, Japan: Tokyo, Latvia: Riga, New Zealand: Auckland, Portugal: Lisbon, South Africa: Johannesburg, United Kingdom: London, and United States: San Francisco.--Boom = Australia: Melbourne, Austria: Vienna, Belgium: Brussels, Canada: Toronto, Chile: Santiago, Colombia: Bogota, Hong Kong: Hong Kong, India: Delhi, Israel: Tel Aviv, Korea: Seoul, Malaysia: Kuala Lumpur, Mexico: Mexico City, Norway: Oslo, Slovakia: Bratislava, Sweden: Stockholm, Switzerland: Zurich, and Taiwan: Taipei City.
Ho
use
pri
ce
s a
re lo
we
r a
t th
en
ati
on
al le
ve
l co
mp
are
d to
ma
jor
cit
ies
http://www.imf.org/external/research/housing/report/pdf/1116.pdfhttp://www.imf.org/external/research/housing/report/pdf/1116.pdfhttp://blogs.wsj.com/economics/2016/12/30/why-it-isnt-yet-time-to-worry-as-global-house-prices-rise/
3
Recent IMF assessments provide a more nuanced view of the within country house price
developments (Table 12).
On house price divergence within countries:
On Australia, IMF assessment points out that house price gains have moderated.
However, the extent of cooling has varied considerably across cities. The strongest price
increases continue to be recorded in Sydney and Melbourne, where underlying demand
for housing remains strong. With house prices still rising ahead of income, standard
valuation metrics suggest somewhat higher house price overvaluation relative to the
previous IMF assessment.
On Austria, IMF assessment notes that the cumulative increase in the house price index
over 20072015 was nearly 40 percent. To a large extent, this increase was driven by
price dynamics in Vienna. The OeNB residential price index indicator, which assesses
whether prices move in line with fundamental factors, points to an overvaluation of
property prices of about 22 percent for Vienna, while prices in the rest of the country
appear broadly in line with fundamentals.
On Turkey, IMF assessment points out that the housing market exhibits significant
variations across cities. Regional variations have been further accentuated by the
presence of more than 2.7 million Syrian refugees since March 2011. Cities near the
Syrian border, which have absorbed larger masses of Syrian refugees have seen
significant rises in local housing prices since 2011, though they have moderated in recent
years.
2 The table provides the dates when these assessments were published. It is important to note that these may not
completely reflect the current situation due to adjustments in housing demand, supply, and policies since
publication.
http://www.imf.org/~/media/Files/Publications/CR/2017/cr1742.ashxhttp://www.imf.org/~/media/Files/Publications/CR/2017/cr1726.ashxhttp://www.imf.org/~/media/Files/Publications/CR/2017/cr1733.ashx
4
Figures 4 and 5
Besides the residential property market, the commercial property market is another important
element of the real estate market. Sentiment indicators for commercial real estate developed
by RICS show a positive relationship with residential prices (Figures 4 and 5).
Figure 4 plots average house price growth for 2013-16 vs. RICs occupier sentiment index
(OSI) average for 2013-16. The OSI indicator is the unweighted average of tenant demand
(+), rent expectations (+), and available supply (-). Figure 5 plots average house price growth
for 2013-16 vs. RICs investment sentiment index (ISI) average for 2013-16. The ISI
indicator is the unweighted average of investment enquiries (+), capital value expectations
(+), and available supply (-).
AUSAUT
CAN
CZE
HKG
IND
CHE
BGR
DEU
HUN
IRL
JPN
NZL
PRT
ZAF
GBR
USA
BRA
CHN
FRA
ITA
NLD
POL
RUS
SGP
ESP
-30
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-10
0
10
20
30
40
50
-10 -5 0 5 10
Investm
ent S
entim
ent
Index: 2013
-16 a
vg.
Real House Price Grow th: 2013-16 avg.
Figure 4: House Prices and Commercial Investment Sentiment Index
Source: Bank of International Settlements, European Central Bank, Federal Reserve Bank of Dallas, RICS,
Savills, Sinyi Real Estate Planning and Research, and national sources
Countries included: Australia, Austria, Brazil, Bulgaria,
Canada, China, Czech Republic, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, South Africa, Spain, Sw itzerland, United
AUS
AUTCAN
CZE
HKG
IND
CHE
BGR
DEUHUN
IRLJPN
NZL
PRT
ZAF
GBRUSA
BRA
CHN
FRA
ITA
NLD
POL
RUSSGP
ESP
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0
10
20
30
40
-10 -5 0 5 10O
ccupie
r S
entim
ent
Index: 2013
-16 a
vg.
Real House Price Grow th: 2013-16 avg.
Figure 5: House Prices and Commercial Occupier Sentiment Index
Source: Bank of International Settlements, European Central Bank, Federal Reserve Bank of Dallas, RICS,
Savills, Sinyi Real Estate Planning and Research, and national sources.
Countries included: Australia, Austria, Brazil, Bulgaria, Canada, China, Czech Republic, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan,
Nether