Over the year from the second quarter of last year to the end of the same quarter in 2010, house prices in Israel were up 9.06 percent.
This article was provided by Buyitinisrael.com, the official guide to Israel real estate.
Over the year from the second quarter of last year to the end of the same quarter in 2010, house prices in Israel were up 9.06 percent. However, house prices declined by 2.15 percent during the second quarter from the first quarter of 2010, as a result of measures taken by the Israeli government in recent months.
Singapore recorded the highest increase in prices in the second quarter among all countries surveyed by the Global Property Guide. House prices were up 34.03 percent over the year to the end of the second quarter of 2010, the highest recorded year-on-year increase in the country since 1995.
Hong Kong followed with an increase of 21.42 percent over the year to end of the second quarter of 2010, a huge improvement over last year’s price decline of 6.96 percent. Taiwan’s house prices were up 11.51 percent over the same period. Residential property prices in Shanghai, China rose 5.78 percent during the year to end of the second quarter of 2010. China has reported strong price rises since mid-2009.
Similar to Israel, the region’s strong economic growth, low interest rates and increases in foreign demand fuelled skyrocketing house prices in these four countries, stoking fears of a property bubble. In response, the governments in these regions have responded by implementing anti-bubble measures by tightening credit supply and by lowering the loan-to-value ratio.
On the back of a concern over the development of a housing bubble in Israel, the central bank decided to implement similar measures, in order to moderate the rise in house prices. A couple of months ago, the Bank Supervision Department issued a directive to the banks, ordering them to carefully examine their housing credit portfolio and their policy in that field, and to make an extra loan-loss provision for housing loans in which the leverage rate exceeds 60 percent. In practice it means that the new regulations for mortgages are making loans more expensive for homebuyers seeking a mortgage of over 60 percent of the value of an apartment. Furthermore, the Bank of Israel raised interest rates for August by a quarter percentage point, for the first time in four months, from 1.5 percent to 1.75 percent as way to stem the surge in housing prices.
US house prices fell 3.31 percent over the year to the second quarter of 2010, but rose in the last quarter by 0.42 percent in seasonally and inflation-adjusted terms – the first quarterly increase since the second quarter of 2009, and the highest since 2007. ”However, the American housing market is braced for a possible fall next quarter,” stated the report. “Existing home sales slumped to 3.83 million units in July 2010, down a record 25.5 percent from last year, after the home buyer tax credit expired.”
Many European countries that have not yet recovered from the crisis nevertheless experienced slower house price falls. These markets include Denmark, Netherlands, France, Slovakia, Spain, Poland, Russia, Iceland, Bulgaria, and Lithuania. Latvia performed best among all European countries in the year to end of the second quarter of 2010. Prices of standard-type apartments rose by 9.38 percent over the year to end of the second quarter of 2010.
Latvia had suffered the worst house price crash during the global economic crisis. Prices fell by 33.83 percent in 2008, and further plunged 52.81 percent in 2009. But in October 2009, house prices stopped falling and have since rallied, though that rally appears now to be petering out according to the report.