Housing prices continue to soar worldwide

As the world becomes more urbanised, the need for appropriate accommodation has become both a priority and a scarcity as housing prices continue to soar.

According to a recent study, South Africa is leading the field in the property rates ’During 2005 house prices increased in 20 countries out of the 23 countries monitored by the Worldwide Commercial Real Estate Information Portal.

On average, house prices increased by 6.7% p.a. worldwide in 2005 compared to 9.4% p.a. in 2004," the portal reports.

In fact, eight countries saw an improvement in house price level increases during 2005 compared to those in 2004. These countries were Denmark, United States, Belgium, Finland, Netherlands, Singapore, Germany and Japan.

SA is priciest
Once again, South Africa at 14.7% p.a. took pole position in the ResearchWorldwide.com House Price Indices Country Rankings for 2005 as it did at 32.6% p.a. in 2004.

Denmark, at 14.3% p.a. almost doubling its house price increases from 2004's 7.3% p.a., is in second place, with a steady France at 14.2% p.a. for 2005 in third place. New Zealand, consistent at 13.5% p.a. increase for 2005 and for 2004, is in fourth place followed by Spain, the United States, Sweden, Belgium, Norway, with Finland and Ireland in joint tenth place.

Large reductions in house price increases during 2005 were seen from market leader South Africa falling from 2004’s 32.6% p.a. to 14.7% p.a. in 2005. Second place leader in 2004, Hong Kong tumbled to 15th place in 2005 with 5.3% p.a. increase.

The United Kingdom saw a sizeable fall from 12.7% p.a. in 2004 to 3.0% p.a. in 2005 with Australia also falling from 8.2% p.a. to register 1.0% p.a. in 2005.

"We expect the slowing down momentum to continue during 2006, however certain countries like the United Kingdom are already seeing a slight improvement in house price increases in late 2005/early 2006," says ResearchWorldwide.com.

Obviously, the largest market worldwide, the US, is being keenly watched as various experts within the US economy are continually predicting expectations of a slowdown and, in some instances, bursting bubbles. In 2004, US house prices rose 8.1% p.a. and in 2005, they rose by 10.5% p.a.

Markets are emotive
House price movements are a function of confidence at an emotive level. At a level of logical reasoning, demand and supply, replacement cost, affordability levels and interest rates dominate thought processes. Markets are moved by sentiments, initial emotive reactions followed by the more cool heads of logical reasoning.

Wherever possible people will not abandon their largest investment, and roof over their heads, by dumping their homes on the market even if emotional sentiment witnesses a fall in house prices," says ResearchWorldwide.com.

In the light of ResearchWorldwide.com believes the slowdown in house price increases will continue during 2006. They do however; expect house price increases in the 23 countries monitored to average in the range of 2.5% - 5% p.a. for 2006 compared to 6.7% p.a. in 2005.

Article from: www.sabcnews.com