• Friday, March 01, 2024
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BusinessDay

Global house prices in upward momentum Q2 2014, rise 33% in Dubai

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The second quarter of 2014 witnessed an upward momentum in house prices with prices rising in 28 of the 44 world’s housing markets which have so far published housing statistics using inflation-adjusted figures. Most of these markets surged during the year to Q2 2014 in Dubai, parts of Europe and the Pacific. The Asian countries witnessed a contrast as their governments implemented cooling measures, successfully restraining their housing markets.

In Nigeria, though the commercial segment of the market continued an upbeat trend, residential house prices remained stable with subdued demand from cautious investors withholding investment on security fears in the country.

A recent report on the Nigerian real estate sector by the BusinessDay Research and Intelligence Unit (BRIU) attests to this, saying that the growth recorded was 3.2 percent in Q1 of 2014 in this sector whereas in Q4 of 2013 it was 10.13 per cent. At the same time, real estate contributed 6.8 per cent to GDP in the first quarter of 2014 compared to 8.4 per cent in the fourth quarter of 2013.  This trend continued into Q2 2014.

Global Property Guide, a research house and web site dedicated to residential property, covering market trends in 101 countries, reports that Dubai continued to ‘wow’ the world  with house prices rising by 33.26 percent  during the year to Q2 2014, and 5.47 percent during the latest quarter. Demand in the United Arab Emirate country remains strong, construction activity continues to increase while the economy is growing at a healthy pace.

The Property Guide report notes that Pacific housing markets were stronger during the period under review, pointing out that house prices in Australia’s eight major cities rose by 7.21 percent during the year to Q2 2014, sharply up on the 2.82 percent increase last year during the same period.

The strength of Australia’s housing market is driven by record low interest rates and strong demand from foreign homebuyers. In New Zealand, median house prices rose 6.66 percent during the year to end-Q2 2014, after a 5.11 percent increase year-on-year to Q2 2013. Construction activity in both Australia and New Zealand continues to rise.

According to Property Guide, though many housing markets are now considered overvalued with Asian governments in particular imposing cooling measures to avoid a repeat of the past, housing markets in much of the rest of the world are rising faster than before.

On the flipside however, South Africa’s housing market is at a standstill, with the price index for medium-sized apartments falling by 0.02 percent during the year to Q2 2014, after an annual rise of 0.66 percent in Q1 2014, and y-o-y declines of 1.3 percent in Q4 2013 and 2.05 percent in Q3 2013.

“Five out of the 10 strongest housing markets in our global survey were in Europe”, the report notes, saying that in Tallinn, Estonia, best performer in Europe, the average price of dwellings surged by 16.72 percent during the year to Q2 2014, far higher than the 7.27 percent growth seen last year.

“This was fuelled by strong property demand and an improving economy. In Ireland, residential property prices rose by 11.97 percent during the year to Q2 2014, a remarkable improvement from a y-o-y increase of 0.56 the previous year”, it said, adding that the UK also showed a strong turnaround.

Chuka Uroko