Denmark, New Zealand Worst Housing Markets of 2008
The IMF (International Monetary Fund) recently published their "World Economic Outlook" for October 2008. The subtitle of the report was "Financial Stress, Downtowns and Recoveries."
There is an interesting graph in section 1.2 of the report entitled "House Prices: Corrections and Consequences." The graph shows the changes in real house prices for a number of the richest countries in the world, including Canada, the United States and the United Kingdom. The graph shows the change during 2007, and then the annual change for 2008 (annualized based on data from the first half or first quarter of the year). The data is quite interesting.
The collapse of the American housing market has been well-covered by mainstream media outlets such as CNN, Fox News, etc. The US mainstream media infiltrates practically every corner of the world, and it can be easy to think that the United States housing market has taken a horrific beating in 2008 compared to other countries in the world. This, however, is not the case.
17 countries were reviewed, and according to the report, seven of the listed countries' real estate markets have actually fared worse in 2008 than the United States. The United States housing market has declined between 4-5% total in 2008. According to this report, the US market also declined in 2007, and was one of the few major real estate markets to post a decline.
The country that has posted the biggest decline in Real House Prices in 2008 has been Denmark, and it's not even close. After posting a slight decline in 2007, the Danish housing market has collapsed in 2008, posted an annualized loss of about 12%. This is far worse than countries such as New Zealand and the United Kingdom, who have posted the second and third worse declines of 2008.
Countries such as Spain, Sweden, Norway and even Canada have posted worse declines than the United States in 2008. Many of these countries posted gains in 2007, while the United States housing market has been slumping since 2005-2006.
Other countries that have posted declines in 2008 include: Australia, France, Finland, Japan, Ireland, Italy and the Netherlands.
Switzerland is unchanged while Korea has posted a modest increase.
All told, 15 of the 17 countries that were analyzed for this report posted declines in 2008. In 2007, 12 of the 17 countries posted gains.
Australia led the pack in 2007, as its real estate market posted a gain of about 11%. Canada posted a healthy gain of approximately 10%, while Sweden posted a gain of around 9%. Other strong real estate markets included Norway, the United Kingdom and New Zealand.
Countries that posted losses in 2007 as well as 2008 included: Ireland, Denmark and the United States.
The United States housing market is down in 2008, but other markets are clearly suffering as well. The United States housing market led the worldwide decline in housing values - the big question is, will it lead the recovery as well?
Source: IMF - World Economic Outlook (October 2008)
Filed under: Real Estate News | The Economic Meltdown