Europe, Asia lead global housing markets as Dubai prices plunge

Despite the softening in the economy of the Eurozone, the housing markets in Europe came off strongest in the second quarter of this year such that of the five markets that witnessed the highest housing price rises, three were from Europe while the other two from Asia.

On the flipside, the United Arab Emirate (UAE), particularly Dubai – arguably the world’s most sizzling real estate market – took a plunge leading to the biggest y-o-y house-price declines in this region.

The Global Property Guide, a research house and web site dedicated to residential property, covering market trends in 101 countries, confirmed in its latest second quarter 2015 report on global markets that Ireland, Estonia and Iceland, all in Europe, recorded house prices averaging +10.81 percent, +8.99 percent and +6.19 percent respectively, while Hong Kong and the Philippines, both in Asia, recorded +16.43 percent and +6.61 percent, respectively.

Matthew Montagu-Pollock, publisher of the Guide, disclosed in the report that Dubai was, once again, the world’s weakest housing market, pointing out that the emirate’s residential property prices plunged 11.72 percent during the year to Q2 2015, the second consecutive quarter of house price falls, and the biggest y-o-y drop since Q1 2011, noting that house prices dropped 4.28 percent in the latest quarter.

“Dubai’s property market has been one of the world’s most volatile. Dubai saw one of the world’s worst housing crashes with house prices plunging by 53 percent from Q3 2008 to Q3 2011. The housing market started to recover in 2012, recording double-digit house price increases from Q2 2012 to Q4 2014. The property market started to show weakness in the second half of 2014, amid housing oversupply, subdued demand and slower economic activity,” Montagu-Pollock observed.

In Africa, the two leading housing markets – Nigeria and South Africa – recorded slight declines in house prices. In Nigeria, the housing market witnessed an oversupply, subdued demand and high vacancy rate estimated at 48 percent by Bismarck Rewane, CEO of Financial Derivative Company, at the high-end market.

“Because of the fall in the price of oil in the international market coupled with lack of clear policy direction from the new government in the country, the housing market at the upper end is struggling,” Drogba Ibirogba, an estate surveyor and valuer, said in Lagos recently.

South Africa’s housing market is slowing and the country’s price index for medium-sized apartments rose by a meagre 0.6 percent during the year to Q2 2015, and Montagu-Pollock pointed out that house prices actually fell during the latest quarter Q2 2015 by 1.02 percent.

He noted that during the year to Q2 2015, house prices rose in 24 of the 39 world’s markets that have so far published housing statistics, using inflation-adjusted figures, adding that the more upbeat nominal figures that are more familiar to the public, showed house price rose in 28 countries and declined in 11 countries.

“Inflation-adjusted figures are used throughout this survey, which covers the period till end of second quarter of 2015. In the case of Kiev, Ukraine, the Global Property Guide adjusts using the official US inflation rate since Ukrainian secondary market dwelling sales are denominated in US dollars, as is the house-price index,” he said.