Asian property market soars, Europe slows

Permalink: Asian property market soars, Europe slows
by Kay Murchie

According to The Global Property Guide, the online international property news portal, the global house price boom has begun to slow for countries within Europe but Asia’s property market is picking up pace.

France, Sweden, Ireland, Spain, Greece, the Netherlands, Switzerland and Portugal are slowing and higher interest rates are thought to be responsible. The European Central Bank (ECB) raised its key interest rate 9 times to 4% in June 2007.

In addition, Estonia is experiencing a slowdown following the biggest increase in property prices for 2005 and 2006 but has since reported only a 5% rise in the first quarter of 2007 compared to a record breaking 77% rise for the same quarter in 2006.

The European countries which have not implemented the Euro have experienced stronger house price increases over 2007’s first quarter than countries with the Euro, according to The Global Property Guide.

Latvia plans to adopt the Euro in 2010 and currently has the biggest increase for 2007 with an appreciation of 62% for the first quarter of 2007. However, research from Latio, an estate agent, suggests that prices have already started to decline for the second quarter of 2007.

Asia-Pacific is now emerging as the next area to experience house price increases following news that the market in the Philippines, Singapore and South Korea increased by more than 10% year on year for the first quarter of this year.

Many countries such as Thailand and Israel are showing no signs of an increase, allegedly due to increased political and security concerns in the Middle East. Thailand’s house prices are down from an 8% increase to the first quarter of 2006 and Israel’s house prices declined by 10% in the first half of 2007.