Residential property price developments
R Szemere
Advanced economies
Real residential property prices continued to increase significantly in most of the advanced economies in 2014 (Graph A). They rose by 3-5% in Australia, Canada, New Zealand and the United States. They also continued to trend upwards in several European countries outside the euro area, increasing by around 10% in Sweden and the United Kingdom over one year, and more moderately in Denmark. The euro area saw a slight increase in aggregate, for the first time in seven years (by 1% year on year), although there remained important disparities across the member states. Real property prices grew by 4% in Germany, 2% in both Portugal and Spain, and a marked 16% in Ireland, albeit from subdued levels. On the other hand, price declines continued, especially in Greece (-4%) and, more moderately, in France and Italy. Contrasting with the above developments for major advanced regions, Japanese prices fell on a year-on-year basis in the fourth quarter, by 2%.
Emerging market economies
The picture in Asia was mixed. Real residential property prices increased by 10% in India, and to a lesser extent in Hong Kong SAR, Malaysia and Thailand, but fell by 5% in China. Turning to Latin America, real residential property prices remained relatively stable in Brazil and Mexico, but grew by 9% in Colombia. They also increased in South Africa (+4%). In central and eastern Europe, real residential property prices rose in Hungary (by 7%), and to a lesser extent in the Czech Republic and Poland. Prices increased by 6% in Turkey, but fell by 6% in Russia (Graph A).
Developments since 2007
Advanced economies
In most of the advanced economies, real residential property prices were still below their end-2007 levels as of the fourth quarter of 2014, especially in the euro area (by 14%), the United States (13%), the United Kingdom (7%) and Japan (6%). However, the euro area situation masked some important disparities. Real prices had declined by around 40% in Greece, Ireland and Spain, by 23% in Italy, and more moderately in France. But they had risen by 23% in Austria and 7% in Germany (Graph B). Residential property prices bottomed out between mid-2012 and early 2013, and then started to increase in several European countries, especially Ireland and the United Kingdom. Lastly, real property prices were well above their 2007 levels in those few advanced economies that were less affected by the financial crisis (by 17% and 11% in Canada and Australia, respectively) as well as in some European countries outside the euro area, eg by close to 20% in Norway and no less than 30% in both Sweden and Switzerland.
Emerging market economies
Real residential property prices were generally well above their end-2007 levels in a large number of emerging market economies. This was particularly the case in Asia, especially in Hong Kong SAR (+89%), India (+52%) and Malaysia (+42%) despite repeated attempts by central banks to slow this growth (Kuttner and Shim (2013)). Major exceptions to this picture were China and Korea, where price levels were roughly comparable to those observed in 2007. Real prices had also increased substantially since 2007 in Israel, as well as in a number of Latin American countries: they had doubled in Brazil and Peru, and had increased by 50% in Colombia - but had barely moved in Mexico. By contrast, prices declined in several central and eastern European countries, including Russia. That said, prices had bounced back most recently in several countries in the region (Graph B).
A note focusing on the most recent developments is published every February, August and November. Q1 2015 data already published for some countries are already available in the BIS data sets, but Q4 2014 data are not yet available for Chile. Price developments since early 2008 for the Czech Republic, Japan and Portugal, and since the first quarter of 2009 for India and Romania. For China, BIS estimates based on market data.
References
K Kuttner and I Shim (2013): "Can non-interest rate policies stabilise housing markets? Evidence from a panel of 57 economies", BIS Working Papers, no 433, November.
M Scatigna and R Szemere (2015): "BIS collection and publication of residential property prices", Irving Fisher Committee Bulletin, no 39, April.
M Scatigna, R Szemere and K Tsatsaronis (2014): "Residential property price statistics across the globe", BIS Quarterly Review, September, pp 61-76.
B Tissot (2015): "Monitoring house prices from a financial stability perspective - the BIS experience", International Statistics Institute Regional Statistics Conference, 16-19 November 2014 (forthcoming).