As people stream into the Middle East cities that have had building booms, prices have risen sharply. The best example is Dubai, where prices rose 24% last quarter, according to Global Property Guide.
While Dubai’s results were particularly good, the global market in general is in the midst of a recovery:
The wider context is that the global house price boom continues. House prices rose in 30 of the 39 world’s housing markets which so far published housing statistics, using inflation-adjusted figures. The more upbeat nominal figures, more familiar to the public, showed house price rises in 32 countries, and declines in only 7 countries.
The most surprising result from the study is the rise in prices of homes in Europe. The recession there has not ended in many nations, although the financial situation is no longer dire. As a result:
Four out of the five strongest housing markets in our global survey were in Europe. In Tallinn, Estonia, best performer in Europe, the average price of dwellings surged by 15.3% during the year to Q3 2014, up from the 12.46% growth seen last year. House prices increased 2.51% q-o-q during the latest quarter. This was fuelled by an improving economy. In Ireland, residential property prices rose 14.52% during the year to Q3 2014, a remarkable improvement from a y-o-y increase of 3.45% in the same period last year. Irish house prices rose strongly by 6.43% q-o-q in Q3 2014. The UK property market continued to show impressive performance. Nationwide house prices rose by 8.95% y-o-y in Q3 2014, a sharp improvement from an annual increase of 1.47% in the previous year and the second biggest increase since Q4 2004. In Turkey, house prices rose by 7.51% during the year to Q3 2014, after an annual rise of 4.65% in the previous year. House prices increased strongly by 3.87% during the latest quarter. Likewise, Iceland’s property market also performed strongly, with house prices rising by 6.7% during the year to Q3 2014, more than thrice the 2% y-o-y increase seen in the same period last year.
Because of conflicts in the region, the housing markets in Russia/Ukraine dropped 37% in the third quarter.
China’s cooling economy has started to show in the housing market. If banks tighten mortgage rules, the figures could get worse:
China’s once booming property market is now weakening significantly. In Beijing the price index of second-hand residential buildings fell by 4.11% during the year to Q3 2014, in sharp contrast with the spectacular growth of 14.26% over the same period last year. During the latest quarter house prices in Beijing fell by 3.83%.
Despite the perception in the United States that the housing market has recovered, the improvement is relatively small when looked at in a global context:
In the United States house price rises are now decelerating sharply. The S&P/Case-Shiller seasonally-adjusted national home price index rose by 3.08% during the year to end-Q3 2014, down from y-o-y price rises of 4.12% in Q2 2014, 7.28% in Q1 2014, 9.1% in Q4 2013, and 9.31% in Q3 2013. House prices increased by just 0.77% during the latest quarter.
Americans who want better housing recoveries need to move to Dubai.