Towards brighter times in the housing market

By Mike Kaas-Stock

In Sweden, the fall from the autumn of 2008 of 10% has now stabilised and the market is in full speed in many areas. Sales of second homes, are however still weak.

In the U.S., there is a level of optimism entering the market, prices have increased slightly in some areas, particularly on the west coast, but many economists believe the improvement in the whole country will be slow and take a long time.
 

In England, there have been increases in house prices over the past five months, which also must be considered in the context of fewer homes being offered for sale. Turnover and the pace of housing however is far lower than normal, and if it continues at the same pace, economists believe it will take 18 months before returning to the same level as before the crisis.

Here's clippings from other media around the world:

 

 
US economy emerges from recession

• World's largest economy grew for the first time since 2008
• Consumer spending and home-building spurs growth
• Economists still cautious about recovery prospects

The United States economy, the world's largest, unofficially emerged from recession in the third quarter of the year, growing at a better-than-expected annualised pace of 3.5%.
The growth, spurred by rebounding consumer spending and investment in home-building, marked the first positive quarter since the second three months of last year. Economists had expected a figure of around 3.3% after a drop of 0.7% in the second quarter.
The return to growth means the US was in recession for four consecutive quarters, a better performance than Britain, which remains in recession after six quarters in a row of contraction.
However, in the US recessions are officially declared by the National Bureau of Economic Research. By its calculations, the US tipped into recession at the end of 2007 and it would probably require a lot more positive data before it declares the worst recession since the Great Depression of the 1930s to be over.

 

Weak dollar, low NY property prices woo foreigners

Wed Oct 14, 2009 8:00am
By Basil Katz

NEW YORK, Oct 14 (Reuters) - After a year most investors would like to
forget, foreign real estate buyers are being swayed to spend again in
New York City by a weak U.S. dollar and property prices at levels not
seen for years, say experts.
Real estate brokers and analysts say they have noticed more foreign
investors looking to purchase in New York -- boosting the market's
recovery hopes just a year after the city's Lehman Brothers bank
collapsed and a financial crisis spread globally, plunging the United
States and other countries into recession.
Russian investors are among those leading the way with the country's
richest man, Mikhail Prokhorov, recently reaching a $200 million deal
to buy an 80 percent share in the New Jersey Nets basketball team and a
45 percent stake the Atlantic Yards, a real estate development in New
York's Brooklyn borough where the team will play if the project is
completed.
Irina Levieva, a broker at the Ostrov Realty Group, said a year ago
"foreign buyers had disappeared" but that now they were expressing
interest and buying properties again.
"I've been contacted by one of the largest Russian real estate
investment funds. They don't want to build, they want to invest,"
Levieva said.
Earlier this month a penthouse on Manhattan's Central Park West sold
for $37 million to a Russian investment fund, the New York Observer
reported. And in June, billionaire Russian financier Andrei Vavilov
bought an apartment in Manhattan's Time Warner Center for $37.5
million.

 

Global economy on the slow road to recovery, says IMF

Larry Elliott
guardian.co.uk, Thursday 1 October 2009 07.52 BST

The International Monetary Fund today said fears of a global depression had been all but eliminated as it predicted a sluggish recovery from the steepest drop in activity and trade since the Second World War.
In its half-yearly World Economic Outlook, the IMF revised its estimates of growth in both 2009 and 2010 after detecting signs of improvement in the west and developing countries.
However, it stressed the pace of growth would be too sluggish to prevent further increases in unemployment across the global economy and warned there was a risk of credit constraints and weak demand derailing the recovery.
The WEO predicted a contraction in the global economy - the first since 1945 - of 1.1%, a slightly less gloomy estimate than the 1.4% drop it was expecting in July.
Growth is forecast to turn positive in 2010, with the 3.1% expansion up on the 2.5% pencilled in three months ago.

 

House prices in major Australian cities are forecast to grow by about 20 per cent between now and 2012.

October 14, 2009 - 1:49PM

QBE LMI's Housing Outlook report for 2010 to 2012, researched by BIS Shrapnel, confirms that recent low interest rates had helped to alleviate mortgage pressures on households, while bringing housing affordability back to its most attractive level for almost a decade.
QBE LMI chief executive Ian Graham said low interest rates, solid growth in rents and housing shortages would create favourable conditions for a strong recovery in residential property prices through to 2012.

 

Spain is sliding into a full-blown economic depression with unemployment approaching levels not seen since the Second Republic of the 1930s and little chance of recovery until well into the next decade, according to a clutch of reports over recent days.

By Ambrose Evans-Pritchard
Published: 10:28PM BST 24 Sep 2009

The Madrid research group RR de Acuña & Asociados said the collapse of Spain's building industry will cause the economy to contract for the next three years, with a peak to trough loss of over 11pc of GDP. The grim forecast is starkly at odds with claims by premier Jose Luis Zapatero, who still says Spain's recession will be milder than elsewhere in Europe.
The construction sector will shrink from 18pc of GDP at the peak of the boom to around 5pc, making it unlikely that there will be any significant recovery before 2012. Even then growth will be "slow, weak, and fragile".
The Spanish government can do little to cushion the downturn. "The room for manoeuvre in fiscal policy has been exhausted," said Mr Ruiz.
The Bank of Spain made heroic efforts to counter the effects of the bubble by forcing banks to put aside extra reserves, known as dynamic provisioning, but the sheer scale of the problem has washed over the defences.
Spain no longer has the escape valve of devaluation to claw back market share. It cannot resort to emergency monetary stimulus - as Switzerland, Britain, the US, and Japan is doing to prevent the onset of debt deflation. Prices are already falling at a rate of 1.2pc.

Thursday, 15 October 2009 08:40 Ray Clancy

 

A chronic lack of property for sale is pushing up prices of residential real estate in the UK but there is still no sign of increased lending, according to the latest figures to be released by various industry sources.

UK house prices rose 2.6% in the three months to the end of August, according to The Department for Communities and Local Government (DCLG). It said prices increased by 0.5% on average in August alone, and over the quarter to the end of the month were up 2.6%.
At the same time The Royal Institution of Chartered Surveyors revealed that its headline house price balance has grown to its highest level since a year ago. Almost a quarter, some 22%, of surveyors thought prices had gained rather than declined during September, the highest amount since May 2007.
The organisation, though, is warning that the country is divided, with prices increases firmly centred on London and the South East of the country and it is a chronic lack of supply that is keeping prices up.
Experts in the UK real estate industry are continually warning that more lending is needed if the recovery in prices is to be sustainable. This comes as the latest figures show that lending was down in August.

 

The Knight Frank Global House Price Index shows property values increased in the second quarter in almost half of 32 countries surveyed

By Leona Liu

Real estate markets worldwide are stabilizing and showing signs of a tentative recovery, according to a newly released report from London-based global property consultancy Knight Frank.
The quarterly Knight Frank Global House Price Index shows property values increasing in almost half of 32 countries surveyed during the second quarter of this year. "Significantly, quarterly price falls accelerated in only 22% of the locations and did not exceed 10% in any country," says Liam Bailey, head of residential research for Knight Frank. "This compares with double-digit falls in a number of locations during the first quarter."
Some of the strongest signs of recovery are coming from the Nordic countries, with prices up over the previous quarter by 5.3% in Norway, 3.9% in Finland, and 3.6% in Sweden. But countries as diverse as Australia, Israel, and the Netherlands also are posting solid gains.

 

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