TORONTO, June 13, 2012 /CNW/ - Many residential property markets around
the world remain under considerable stress, according to the expanded
Global Real Estate Trends report released today by Scotiabank. Home
prices, adjusted for inflation, declined on a year-over-year (y/y)
basis in the first quarter of 2012 in the majority of international
markets tracked in the report.
"The ongoing strains are most pronounced in Europe, particularly in the
recession-plagued peripheral economies," said Adrienne Warren, Senior
Economist, Scotiabank. "Fiscal austerity measures, rising joblessness
and tight credit conditions have sidelined potential buyers even as
central banks maintain highly accommodative monetary policy settings."
Housing conditions have also cooled in Australia and, to a lesser extent
Canada, according Ms. Warren. "Nevertheless, Canada's housing market
remains an outperformer among developed nations. Adjusted for
inflation, the national average house price fell two per cent y/y in
the first quarter of 2012. Price trends are relatively steady in the
majority of local markets, though a few, notably Toronto, continue to
report strong appreciation."
The temperature has also been turned down on housing activity in many
developing nations in Asia and Latin America, she said. This in part
reflects successful efforts by authorities to rein in excessive
property speculation through monetary restraint and/or regulatory
measures. But it also mirrors an overall loss of economic momentum
alongside the unwinding of earlier fiscal stimulus and reduced global
"The intensifying euro zone debt crisis, increasing financial market
strains and moderating global growth suggest there is more downside
risk to property prices in the near-term," said Ms. Warren.
"Eventually, however, improved housing affordability and pent-up demand
will put many of these markets on a firmer footing." For example, the
U.S. housing market has shown signs of stabilization in early 2012,
though it will take more time to build renewed momentum.
The June 2012 issue of Global Real Estate Trends expands the report's
international house price coverage to a number of emerging markets in
Latin America and Asia.
Scotiabank economists and market strategists are located in Canada, the
U.S., Mexico, Peru, Chile, Thailand, Hong Kong, the United Kingdom and
France. The team provides in-depth commentary regarding the factors
shaping the outlook for the global economy, currencies, capital markets
and commodities as well as coverage of monetary and public policy
SOURCE Scotiabank - Economic Reports
For further information:
Adrienne Warren, Scotiabank Economics, (416) 866-4315, firstname.lastname@example.org; or Joe Konecny, Scotiabank Media Communications, (416) 933-1795, email@example.com.