housing markets around the world

The online “Global Property Guide” provides easy access to information – loaded with charts – on housing markets in every corner of the world. Even if, like me, you are not in the market, it is interesting to learn what is going on in markets around the world.

Here is a small sample from the entry for Austria:

Vienna has one of the highest percentages of renter households in the world, with about 75% of homes rented in 2012. In Austria as a whole, households own 56.4% of primary residences, while 41.2% are rented, according to the 2012 Austrian microcensus. Austria’s home ownership rate is way below the EU-27’s average rate of 70.7% (2011).

The high percentage of rented residential properties is due to the large proportion of subsidized low-rent apartments in the general rental market, according to Martin Schneider of the Oesterreichische Nationalbank (OeNB).   Limited tax incentives for home ownership also contribute to the high proportion of renters.

House prices in Vienna have been rising consistently since Q3 2004. During the housing boom (2003-2013), house prices in the capital soared by 99.6% (61.7% in real terms). On the other hand, property price changes in the rest of Austria have been erratic ever since the index was assembled in 2000. House prices rose by just 37.1% (11.1% in real terms) from 2003 to 2013.

Vienna – and, even more, the rest of Austria – has experienced modest increases in house prices since 2003.

Here is another sample, from the entry for Indonesia:

In recent years, the Indonesian property market has seen very weak real growth (if any) relative to its neighbouring Asian countries.

Over the past five years:

    Property prices rose by 2.56% (-7.68% inflation-adjusted) in 2008
    Property prices increased by 2.3% (-0.28% inflation-adjusted) in 2009
    Property prices rose 2.91% (-3.21% inflation-adjusted) in 2010
    Property prices rose by 5.05% (0.89% inflation-adjusted) in 2011

The relatively poor price performance of residential property in Indonesia has been something of a puzzle.  There is tremendous pent-up housing demand. Indonesia has the world’s fourth largest population of 245 million people. Despite strong economic growth and high levels of investment, some factors that have hampered the growth of Indonesia’s housing market are:

    High mortgage interest rates
    Foreign ownership restrictions
    High costs of building materials
    High tax rates
    Red tape in government

Indonesia’s housing market has been stagnant, at least in the last five years. One section of the report is titled “Rental yields high, but property investment unattractive for foreigners.” Why? Because of high taxes on rental income.

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