World housing market condition in 2015
2015 is not a good year for the housing market as house prices are crashing worldwide. This is the second housing market crash of this century, first one was the famous housing bubble of 2008. House prices were rising since 2009. But this rise in house price was not sustainable due to the stagnant wages and abnormally low interest rates. 2015 is indeed a year of bloodbath for housing market. Let’s discuss the housing market crash in different countries.
World housing market is crashing worldwide
USA: house price crash 2015
USA house price recovered from the great credit crunch of 2008 but its housing market is now in decline. According to Economagic, house prices are declining in USA. In USA, house prices peaked in Q4 of 2014, when average house price was $380200. In Q1 of 2015 average house price in USA decreased to $358900 and USA house price further decreased to $334300 in Q2 of 2015. Since last year, house prices have declined by 15% in USA.
UK: house price crash 2015
UK real estate sector revolves around London. Knightsbridge, Mayfair, Belgravia and Kensington & Chelsea are located in central London and have most expensive properties in the world. During housing crash of 2008, UK house prices saw 20% decline. Now UK housing market has recovered the old house price peak but once again housing market is crashing in UK. Central London house prices are down by 10%. According to Daily Mail Online, UK housing market will crash by 30%.
Canada: house price crash 2015
Canada house prices are declining due to the recent rise in interest rate by the Bank of Canada. Canadian house prices have already decreased by 5% and more is coming this fall. According to The Economist, housing is 25% over valued in Canada and will correct with the passage of time.
Australia: house price crash 2015
Australia is a beautiful island country but its housing market is most overvalued in the world due to abnormally low interest rates. According to The Sydney Morning Herald, Australian housing market is ready for bloodbath due to oversupply of houses and low demand for properties. Fall will decide the fate of overvalued housing market of Australia.
Hong Kong: house price crash 2015
Hong Kong is a small island that has very limited land and houses are extremely expensive. You just need to spend $1.5 million for apartment of size 120 square meters. But volume of sale has already declined by 30% in Hong Kong. Hong Kong house price saw an increase of 10% in the first 6 months of 2015, but now prices have fallen more than that. Many economists are predicting the fast correction in the overvalued housing market of Hong Kong. According to South China Morning Post, house prices can further decrease by 20% in Hong Kong.
China: house price crash 2015
Last few months saw the Chinese stock market crash that is considered the worst in Chinese history. This crash has bad effects on Chinese housing market that is generally considered overvalued by many economists. Chinese housing market has already crashed by 10% and even more correction is on the way as predicted by International Business Times.
Dubai: house price crash 2015
Dubai property is not performing well in 2015. In 2015 the sale volume has already decreased by 70% in Dubai. Dubai property prices are already 10% down. According to Reuters, Dubai housing market is going for 20% price correction in 2015 due to oversupply of houses that are not finding suitable buyers.
India: house price crash 2015
Indian housing market is ready for 50% correction according to many economists. House prices are already correcting in major Indian cities like Mumbai, Delhi, Hyderabad, Chennai and Calcutta. Indian housing market is facing two major issues, interest rate rise and declining purchasing power of the general public due to high inflation. According to FIRSTPOST, Indian housing market will crash in 2015.
Why housing market is crashing worldwide in 2015?
World Housing market is crashing due to bad economic performance. World economic growth is artificial due to money printing and abnormally low interest rates. If we see employment figure, numbers are just manufactured. How prices can go up when people have low purchasing power and house to income ratio is more than 4. We will see massive correction in house prices worldwide in 2015 as state banks have no control over economies. Banks have already utilized the all options to artificially improve the economies. According to famous American economist, Greg Hunter of USAWatchdog, Federal Reserve has utilized all bullets and no option is left. Therefore, 2015 is a year of massive correction for the overvalued housing market. One thing is for sure, whenever house price to income ratio is more than 4, house price correction follows. People should also worry for the interest rate rise. Interest rates cannot be low for long period. Interest rate rise will herald the bloodbath for housing market as rise in interest rate will make the mortgages expensive and we will see foreclosures.
Pakistan housing market is performing well in 2015 due to record low interest rates and better economic performance
Pakistan housing sector revolves around Karachi, Lahore, Islamabad and now also Gwadar. Pakistan housing sector is performing well due to record low interest rates and increased economic activates. State Bank of Pakistan has decreased the interest rate to 6%. This is the lowest interest rate in the history of Pakistan, as Pakistan’s historic average interest rate in 12%. Pakistan’s economy is also improving due to better law & order situation and direct foreign investments. China is investing $46 billion in Pakistan for Gwadar-Kashgar Economic Corridor, Gwadar Port and many other energy and infrastructure projects. Due to these investments, investors’ confidence is back and people are investing in Gwadar real estate sector. Property prices have already increased by 5 times in Gwadar. 2015 is a good year for Pakistan real estate sector and prices have risen by more than 10% as compared to 2014. This rise in Pakistan property prices is good but people should also consider the rise in interest rate and its bad effects on real estate market. People should never forget the great property boom of 2003-2005 which ended due to increase in interest rates. In 2005, 1 Kanal house price in DHA Phase 5 Lahore was 15 million PAK Rupees, which decreased to 7 million PAK Rupees due to rise in interest rates.