Global Housing Market

global housing marketWhile you may not be planning to move abroad, looking at the global housing market can be a good way to predict and evaluate the US market. At Waypoint Real Estate Group, we know that good research can lead to good buying and selling. We want to share some of our research with you on the global housing market.

Analysts around the world understand the value of the global housing market and track it in detail. The Economist offers a spectacular interactive tool to track housing trends from 1975-2014. Based on two primary factors, affordability (income growth vs. housing prices) and investment factors (looking at equity prices to earnings), this tool lets you compare global housing markets in 20+ countries around the world, while giving you the option to select the time period that interests you. It also gives you the option to see the percentage of change, average price against income and prices against rents. Check out the tool here and see if you can spot any trends. Be forewarned, for the data lover at heart this tool could easily eat up an hour of your day. The Economist concludes that based on this information, houses are overvalued ~25% in nine of the countries studied, specifically China, Canada and New Zealand. They predict that these trends are unfortunately similar to that of the American housing market before the crash.

Similar global housing market trends are reported from a Forbes article published in June 2014.

“Over the past year, 33 out of 52 countries in the IMF’s Global House Price Index have showed increases in home prices even when the economies in these countries are slowing down. Economic theory suggests that home prices, rents, and incomes should move in tandem with the economy.”

According to Forbes, some of the economies at risk of an uneven ratio of income vs. housing price value include China, Brazil and Australia. Home values have decreased significantly in India, Greece and Italy in recent years as a result of economic changes.

While Forbes, The Economist, and Waypoint Real Estate Group all can’t predict the future, looking at past market trends can be a good way of being an educated buyer or seller in the future. If you’d like to talk more about the global housing market, give us a call and we would be happy to discuss what these trends could mean for your future investments.

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