Thursday, August 27, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
RESIDENTIAL PROPERTY values continued to decline in the country’s financial district, reflecting the overall slump in the global property sector.
Data from the Global Property Guide, an online property research outfit, showed house prices in Makati went down by nearly 2% in the second quarter over the same period last year. The contraction reversed a 3.29% house price increase last year.
House prices also went down by nearly 1% in the second quarter compared with the first quarter.
While the situation in the housing sector is still ‘negative,’ more countries are reporting better prices, an indication of momentum toward eventual recovery, according to the Global Property Guide.
The Global Property Guide uses price changes after inflation, giving a "more realistic picture" than the more upbeat nominal figures usually preferred by real estate agents.
Without accounting for inflation, however, Makati house prices went up slightly by 1.25% in the second quarter compared with the same period last year, much slower than the 13.35% hike recorded last year.
Quarter-on-quarter, prices did not move.
Globally, housing markets are showing signs of recovery, according to the latest survey of the Global Property Guide.
Seven countries have emerged from the house price slump. However, most countries suffered sharp house price falls during the year to the second quarter, meaning the "general situation remains negative."
After experiencing declines in 2008, house prices in China, Portugal, Australia, New Zealand, France, Sweden and Hong Kong rebounded during the second quarter.
In Shanghai, China, house prices were up by 1.96% during the year to the end of the second quarter. These gains occurred entirely during the quarter, when Shanghai’s house prices rose by 2.09%.
China’s house prices started falling in the last quarter of 2008, but a strong increase in government spending revived both the housing market and the economy, which has seen 7.1% GDP growth during the first half of 2009. Chinese property prices are now widely expected to increase further.
Average house prices in the Algarve, Portugal, at _1,429 per square meter, were up by 2% during the second quarter. House prices in Portugal as a whole rose by 1.01% during the quarter. Prices were down by only 0.43% on the year to the second quarter, compared to a decline of 7.24% at the end of the second quarter of 2008. New construction orders in Portugal increased by 12.3% during the second quarter.
Australia and New Zealand saw house price increases of 3.73% and 3.31%, respectively, during the second quarter. All regional capital cities in Australia registered quarterly house price increases, ranging from 2% to 5%. However, over the year to the second quarter, there was a price decline of 2.80% in Australia.
In New Zealand, the annual change is still negative, at -3.07% in the year to the end of the second quarter. But in July 2009, New Zealand had the first yearly house price increase since 2008.
After falling for the last five quarters, house prices in France were up by 3.31% during the second quarter, thanks to government subsidies. In Sweden, house prices were up by 3.16% during the quarter. Hong Kong’s house prices increased by an average of 8.9%.
The US housing market is stronger, with the Case-Shiller house price index up 0.35% during the second quarter, from a decline 6.46% during the previous quarter.
Israel’s housing market has continued to sail through the global recession. The average price of houses rose 8.40% year-on-year to the second quarter. But the quarterly increase was down to 1.02%, a drop from 5.52% in the first quarter.
Switzerland saw an increase of 4.90% over the year to the second quarter. However, house prices barely increased during the quarter itself.
A key indicator of improvement is the market’s momentum, i.e., the number of countries that did better this year, than during the previous year. Nine countries improved their year-on-year performance to the end of the second quarter, compared with the previous year. In contrast during the year to the end of the first quarter, only six countries did better than the previous year.
The house price index for Dubai fell by 49.9% during the year to the end of the second quarter. But quarterly data showed that Dubai’s downward house price spiral is moderating. House prices fell by 8.92% in the second quarter, much less than the 42% drop in the previous quarter.
Double digit year-on-year declines were also experienced in Bulgaria, Singapore, Iceland, UK, Japan, Denmark and South Africa. Most recent quarter declines in these countries range from 2% to 10%.
The online property research outfit noted that the International Monetary Fund had declared the start of global economic recovery.
"The three big economies of Japan, France, and Germany have recently exited from recession. The emerging economies of Asia have revived, with China leading the pack. Whether this recovery will be sustained is the big question," it said.