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Monday Market Memo | Winners & Losers in the world’s property markets

January 8, 2018Article by Kirsty Rose

GLOBAL GROWTH WIDESPREAD BUT SLOWER

Momentum is weakening across a majority of global property markets, though growth remains the norm nearly everywhere. 15 national housing markets posted a higher rate of value growth in Q3 2017 than a year earlier, but 30 saw the pace of growth decrease. The strongest markets were Iceland (+18.76%), Hong Kong (+13.14%), Macau (+10.53%), Canada (+9.69%), and Romania (+9.36%). The weakest were Egypt (-8.68%), Ukraine (-6.81%), Russia (-6.69%), Mongolia (-5.7%), and Qatar (-2.85%).

LONDON PRICES CONTRACT

According to Nationwide’s latest UK housing index, released on Thursday, London saw a 0.5% drop in house prices in the year to Q4 2017. It was the only region to reverse course, with the national average remaining steady at 2.6% growth, and the West Midlands increasing by a respectable 5.2%. The news was unprecedented in recent times: the London market has risen every quarter for eight years running, and the last time it was the worst-performing region in the UK was in 2004. The average house price in London now stands at £470,922, more than double the national average of £211,333.

VERMIETER VEREINEN SICH!

Vonovia, Germany’s largest listed residential landlord, will buy Buwog, its Austrian counterpart, for €5.2bn cash. The acquisition brings Vonovia’s total holdings to just shy of 400,000 flats, mostly in Berlin, and injects a dose of development know-how to the combined group in aid of further expansion. The deal, funded entirely through new debt, is a bold sign of confidence in Germany’s booming private rented sector.

PROPERTY TAX BENEFITS TRIMMED FOR WEALTHY AMERICANS

New tax legislation signed into law on the 22nd of December scales back subsidies for US homeowners. The law rescinds mortgage interest tax relief for homes worth more than $750,000 and caps the value of state and local taxes (dominated by property taxes) that can be deducted from federal returns at $10,000. The measures, which were subject to last-minute revision, are widely expected to slow sales volumes and the pace of capital appreciation for the most expensive homes.

HOPE SPRINGS IN SOUTH AFRICA

Perennial second fiddle Cyril Ramaphosa vanquished the ex-wife of corrupt President Jacob Zuma to become the leader of South Africa’s ruling ANC party. The close decision makes the well-regarded Mr. Ramaphosa the clear front-runner for the Presidency and goes some way to redeeming South Africa’s squandered investment potential. The rand jumped 5% on the news


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