Scotia Bank Think That Global Housing Markets Show Further Improvement In Q1-00-6583

By Author: rafalinares
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Global real estate markets continued their gradual convalescence in the early months of 2010. Improved
affordability, low interest rates and government purchase incentives have supported a pickup in sales,
which is helping to stabilize prices after the broadly based declines of 2008-2009. A general sentiment
appears to be emerging that residential prices in many of the hardest hit nations are finally bottoming,
even if the recovery is likely to be gradual and protracted.

Among the major developed economies for which first-quarter data are
available, Australia has taken over the lead from Canada (figure 1). Despite
the Reserve Bank of Australia being the first off the mark among major
developed economies in raising interest rates, a solid economic recovery and
strengthening labour markets are supporting rising home sales and prices.
Inflation-adjusted average home prices were up 17.1% year-over-year in Q1,
a sharp acceleration from the prior quarter's 11.4% advance.

The U.K. housing recovery is also gaining traction. Based on data for the ...
... first two months of the year,
real home prices were up 4.2% from a year earlier, compared with a 12-month decline of 1.6% in Q4
and a 15.6% contraction at the start of 2009. Preliminary reports for March and April suggest some
renewed softening in both demand and pricing, though this could reflect in part some uncertainty in the
lead-up to the May 6 U.K. general election.

U.S. home prices were almost back in the black in Q1, recording a year-over-year decline of just 1.1%
compared with 4.6% in Q4. Confidence among buyers is being underpinned by excellent affordability
and improving employment conditions. Nonetheless, the recovery in the battered U.S. housing market
will inevitably be slow as additional foreclosed properties come onto the market, leaving price trends on
a largely sideways track for the time being. The recent expiry of the federal home-buyers tax credit at
the end of April also clouds the outlook.

Spain's residential market remains among the weakest of the major developed economies. Overall
conditions were little changed in the first quarter, with real home prices still declining at around a 6% yearly rate. The country's lagging housing performance mirrors its
relatively weak economic outlook as well as a significant oversupply
of vacant housing units.

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