Adrienne Warren (416) 866-4315
adrienne.warren@scotiabank.com
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Real estate trend

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Real estate trend

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Real estate trend

  1. 1. Adrienne Warren (416) 866-4315 adrienne.warren@scotiabank.com Global Economics GlobalRealEstateTrends Global Real Estate Report is available on: www.scotiabank.com, Bloomberg at SCOT and Reuters at SM1C Scotiabank Economics Scotia Plaza 40 King Street West, 63rd Floor Toronto, Ontario Canada M5H 1H1 Tel: (416) 866-6253 Fax: (416) 866-2829 Email: scotia.economics@scotiabank.com This report has been prepared by Scotiabank Economics as a resource for the clients of Scotiabank. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotiabank nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents. TM Trademark of The Bank of Nova Scotia. Used under license, where applicable. Aggressive monetary policy easing, which has anchored short-term interest rates in many countries near historic lows, alongside pent-up demand are helping to reinvigorate global property markets. Notwithstanding the sluggish pace of economic activity and elevated financial market volatility, inflation-adjusted home prices strengthened year-over-year in the second quarter in the majority of countries in our survey (chart 1). The turnaround is most notable in a number of advanced nations such as the United States and the United Kingdom, but prices are re-accelerating again in some emerging markets as well, including China. The United States maintains its position near the top of our international ranking, with inflation-adjusted home prices rising 8% y/y in Q2. Demand is being bolstered by moderate job growth and near record housing affordability, while low inventories and fewer distressed sales are supporting prices. We expect rising mortgage rates will moderate, but not derail the recovery, which is still in its early stages from a cyclical standpoint. Household finances have improved, consumer confidence is rising and lending conditions are slowly easing. There is also considerable pent-up demand for housing following the multi-year downturn. Canadian housing activity remains buoyant, though the underlying fundamentals for continued gains are becoming less favourable. Average inflation-adjusted home prices increased 2½% y/y in Q2 alongside strengthening sales volumes. Low borrowing costs and balanced market conditions continue to attract buyers, though slowing job growth and the recent uptick in fixed mortgage rates will likely cool activity later in the year and into 2014. Affordability also is challenged in some of Canada’s largest urban centres, primarily for single-family homes. A number of European property markets are showing early signs of revival, mirroring the nascent pickup in economic activity and consumer confidence. The U.K. housing recovery is becoming more broad based, supported by ‘Help to Buy’ stimulus measures introduced in the 2013 budget. Real prices moved back above year- ago levels in Q2 for the first time in 2½ years. Sweden and Switzerland reported steady real price growth in the second quarter. Conditions are weaker in the periphery. Spain’s property market remains in a deep slump. While the rate of price decline is slowing, there is limited prospect of a near-term turnaround with the nation’s jobless rate stuck at over 25%. Irish property prices appear to be Modest Firming In Global Housing Markets Through Mid-Year September 11, 2013 Focus On Canada’s Housing Market p. 2 > -20 -10 0 10 20 Spain Italy* France* Russia South Korea Japan* India Ireland Mexico U.K. Canada Australia Brazil Sweden Germany*** Thailand Chile Switzerland Indonesia U.S. Colombia* China Peru** *2013Q1 **2012Q4 ***2012. Source: Scotiabank Economics 2013Q2, y/y % chg Chart 1: Real House PricesChart 1: Real House Prices *2013Q1 **2012Q4 ***2012 Source: Scotiabank Economics
  2. 2. 2 Global Economics Global Real Estate Trends September 11, 2013 bottoming as demand slowly picks up. However, record mortgage arrears topping 12% of outstanding loans are a significant hurdle to a sustainable housing recovery. Asian property markets are for the most part holding up in the face of slowing regional growth. Despite official policy efforts in recent years to rein in credit demand, real house prices accelerated in the vast majority of major cities in China in Q2. Australian, Indonesian and Thai property markets also gained momentum in the April to June period, though conditions remain weak in India and South Korea, with prices contracting modestly last quarter. Latin American property markets are mixed, with strong price growth in Chile, Peru and Colombia underpinned by relatively solid domestic demand and labour markets. Real house prices in Mexico are flat, with modest nominal price appreciation eroded by persistent inflation. Meanwhile, a weakening economy and high interest rates have led to a sharp cooling in Brazil’s previously red-hot housing market. Focus on Canada’s Housing Market Canadian housing activity remains quite buoyant, supported by low borrowing costs and reasonably healthy employment conditions. Home resales, after declining through the latter half of 2012, recovered over the spring and summer. The volatile pattern of sales may reflect in part uncertainty surrounding repeated moves by Ottawa to tighten mortgage rules and lending guidelines in order to slow the housing market’s momentum. Year-to-date, national home sales are trending slightly below last year’s levels, and are in line with the average pace of the past decade (chart 2). Home prices also are proving resilient. The MLS Home Price Index (HPI), which takes into account changes in the mix of sales by housing type and location, shows national prices tracking around 2-3% year-over-year. This modest rate of house price appreciation is consistent with balanced market conditions and long-term house price inflation. Regionally, Alberta continues to show the strongest overall conditions, as strong population inflows and full-time job growth fuel growing housing demand. Activity in British Columbia remains on the softer side despite some recovery in sales and pricing in recent months. In most other provinces, sales volumes are fairly ‘typical’ and market conditions balanced. Buyers are taking advantage of still attractive borrowing costs, notwithstanding the recent upward drift in fixed mortgage rates. Indeed, the prospect of rate increases may have drawn in potential homeowners from the sidelines. Demand also is supported by immigration and population growth, and mirrors strengthening consumer confidence. New home construction and building permit demand have also firmed in recent months. However, the 183,000 annualized housing units initiated this year is well below last year’s 215,000 units, and in line with underlying 0 2 4 6 8 10 12 14 16 00 02 04 06 08 10 12 Chart 4: Canadian Household Credit Source: Bank of Canada, Scotiabank Economics y/y % change Residential Mortgages Consumer Credit 200 300 400 500 600 00 02 04 06 08 10 12 Chart 2: Canadian Home Resales Source: CREA, Scotiabank Economics 000s, annualized 10-year average 0 50 100 150 200 250 300 00 02 04 06 08 10 12 Multi-unit Single-family Chart 3: Canadian Housing Starts Source: CMHC, Scotiabank Economics 000s of units, annualized Chart 3: Canadian Housing Starts Chart 4: Canadian Household Credit Chart 2: Canadian Home Resales
  3. 3. 3 Global Economics Global Real Estate Trends September 11, 2013 0 2 4 6 8 10 12 14 16 90 95 00 05 10 Multis Singles & Semis units per 10,000 population 25+ household formation requirements (chart 3). The reduction in starts has been focused on multi-unit projects, primarily in Toronto and Montreal, as builders react to reduced new home demand and rising unsold inventory. Underlying fundamentals are less conducive to a further ramping up in housing activity. Any pent-up demand from last year’s slowdown has been satisfied with sales now back in line with historical averages. Moderating job growth — employment gains have averaged 13,000 per month this year, half the average gain in 2012 — also should temper demand. Canadian households appear increasingly reluctant to take on additional debt, heading to repeated warnings from policymakers. Consumer credit and mortgage growth is advancing at its slowest pace in over a decade (chart 4). The household savings rate is trending up. Housing affordability at a national level is still within historical norms, with high home prices offset by ultra-low borrowing costs (chart 5). However, affordability is expected to become a bigger challenge for buyers over the coming year with interest rates now drifting up. The deterioration in affordability should be manageable under a gradual upward trajectory for interest rates, moderate income growth and modest to flat home price increases. A sharp spike in interest rates, a decline in household incomes or a re-acceleration in home price appreciation pose a greater risk. National affordability measures mask more strained conditions in several major centres, primarily for single-family homes in Toronto and Vancouver. Homeowners have a number of options in the face of rising borrowing costs. Variable rate mortgages are expected to remain near historic lows in 2014, and move up only slowly thereafter as the Bank of Canada gradually normalizes monetary policy. Many homebuyers are insulating themselves to a higher rate environment by locking in at historically low rates. For homeowners with a mortgage coming up for renewal, most face a lower rate today relative to the discounted rate available 1, 3 and 5 years ago. The combination of moderately higher interest rates and slowing job growth will likely dampen home sales later this year and into 2014. Meanwhile, increased supply should limit price gains. However, the risk of a large price correction nationally remains low barring a major adverse shock such as a sharp rise in unemployment. Sellers have been responsive to shifts in supply conditions, mortgage quality is solid, and arrears rates are low and edging lower (chart 6). Slowing home sales should in turn lead to a reduction in new home construction. We expect starts will fall to about 170,000 units in 2014, below demographic replacement demand. A period of below-average construction will help absorb excess housing stock. Unsold inventory has been creeping up in recent years with starts exceeding household formation trends, but is not particularly high from a historical perspective (chart 7). 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 90 95 00 05 10 Chart 6: Canadian Residential Mortgage Arrears Source: CBA, Scotiabank Economics % of mortgages 30 days or more past due 0.20 0.30 0.40 0.50 0.60 0.70 90 95 00 05 10 Chart 5: Canadian Housing Affordability Source: Scotiabank Economics Mortgage payment / PDI per worker Long-term average National Average Chart 5: Canadian Housing Affordability Chart 6: Canadian Residential Mortgage Arrears Chart 7: Completed & Unsold Housing Inventory Source: CMHC, Statistics Canada, Scotiabank Economics
  4. 4. 4 Global Economics Global Real Estate Trends September 11, 2013 Canada’s Major Condo Markets Are Rebalancing Potential overbuilding of condominiums in a number of major urban centres remains a concern, especially in light of recent evidence that demand is waning. In Toronto, where reasonably good data on new home sales are available, purchases of both new low-rise and high-rise homes have fallen sharply over the past year. Reduced expected returns have dampened investor demand for new condos, while high prices and supply constraints have undercut low-rise sales. Sales of resale condominiums are holding up better, evidence that demand by owner occupiers (which dominate resales) remains healthy. Homebuilders are responding to the shift in market conditions. Toronto housing starts dropped from a record 48,000 units last year to a 33,000 annual rate over the first eight months of 2013 (chart 8). Based on annual household formation of close to 38,000 from 2006-2011, starts have moved back below underlying housing demand. The slowdown primarily reflects fewer high-rise projects breaking ground. Toronto apartment starts have fallen almost in half this year, from 30,000 units in 2012 to an annual rate of 16,000 from January through July. Given the weakening trend in new home sales, construction will likely move even lower over the coming year. Toronto apartment starts fell to an annual rate of 13,000 in 2009-2010 following the recession slump in sales. Despite the slowdown in starts, a record number of completed condominium units will come onto the Toronto market over the next two years. Given strong condominium rental demand — lease transactions reached a record high in Q2 — low vacancy rates and rising rents, we expect a large number of investor-owned units can be absorbed by the rental market. Even so, new supply will likely outstrip demand, putting some downward pressure on new and resale condominium prices. There are also potential imbalances emerging in the Montreal and Vancouver condominium markets. Here too builders are slowing the pace of new construction in order to reduce inventories — apartment starts this year are down roughly 30% and 10%, respectively (charts 9 and 10). Data on new condominium sales for these markets are limited, though resale reports point to somewhat softer conditions. Over the medium term, a number of factors will continue to support homeownership condominium demand. These include the high cost of single-family homes in Canada’s largest urban centres, lifestyle considerations (e.g. the desire for shorter commutes and lower maintenance) and demographic shifts (e.g. immigration, an aging population and the rise in one-person households). From a supply perspective, development restrictions and land constraints are expected to continue to promote urban intensification. 0 5 10 15 20 00 02 04 06 08 10 12 Single-family Multi-unit Chart 10: Vancouver Housing Starts 000s of units, annualized Source: CMHC, Scotiabank Economics 0 5 10 15 20 25 00 02 04 06 08 10 12 Single-family Multi-unit Chart 9: Montreal Housing Starts 000s of units, annualized Source: CMHC, Scotiabank Economics 0 5 10 15 20 25 30 35 40 00 02 04 06 08 10 12 Single-family Multi-unit Chart 8: Toronto Housing Starts 000s of units, annualized Source: CMHC, Scotiabank Economics Chart 8: Toronto Housing Starts Chart 9: Montreal Housing Starts Chart 10: Vancouver Housing Starts
  5. 5. 5 Global Economics Global Real Estate Trends September 11, 2013 Canadian Residential Markets 200 300 400 500 600 100 200 300 400 90 92 94 96 98 00 02 04 06 08 10 12 $, 000s 000s of units, a.r. Average Price Unit Sales Source: CREA, Scotiabank Economics. Existing Home Sales 1.0 1.5 2.0 2.5 3.0 3.5 90 92 94 96 98 00 02 04 06 08 10 12 ratio of new listings-to-sales Source: CREA, Scotiabank Economics. Roughly Balanced Market Existing Home Inventory -10 -5 0 5 10 15 20 100 150 200 250 300 90 92 94 96 98 00 02 04 06 08 10 12 000s of units, a.r. y/y % change New Housing Price Index Source: CMHC, Statistics Canada, Scotiabank Economics. Housing Starts New Home Construction New Home Inventory 0 5 10 15 20 25 90 92 94 96 98 00 02 04 06 08 10 12 Row & Apartment Singles & Semis 000s of units Source: CMHC, Scotiabank Economics. Housing Starts Canada B.C. Alberta Sask. Manitoba Ontario Quebec Atlantic (000s units, sa) 2007 228 39.2 48.3 6.0 5.7 68.1 48.6 12.4 2008 211 34.3 29.2 6.8 5.5 75.1 47.9 12.2 2009 149 16.1 20.3 3.9 4.2 50.4 43.4 10.9 2010 190 26.5 27.1 5.9 5.9 60.4 51.4 12.8 2011 194 26.4 25.7 7.0 6.1 67.8 48.4 12.5 2012 215 27.5 33.4 10.0 7.2 76.7 47.4 12.6 2013ytd 183 26 35 8 7 60 37 11 2013f 180 25 36 7 7 56 38 11 2014f 170 23 32 7 6 54 38 10 (units, nsa) Vancouver Calgary Edmonton Toronto Ottawa Montreal Halifax St. John’s 2007 20,736 13,505 14,888 33,293 9,294 23,233 2,489 1,480 2008 19,591 11,438 6,615 42,212 10,302 21,927 2,096 1,863 2009 8,339 6,318 6,317 25,949 8,930 19,251 1,733 1,703 2010 15,217 9,262 9,959 29,195 9,133 22,001 2,390 1,816 2011 17,867 9,292 9,332 39,745 8,214 22,719 2,954 1,923 2012 19,027 12,841 12,837 48,105 8,785 20,591 2,754 2,153 2013ytd 19,788 13,877 17,241 37,330 9,358 16,586 3,357 1,730 Year-to-date data are expressed at annual rates. Source: Canada Mortgage and Housing Corporation (CMHC), Scotiabank Economics calculations and forecasts.
  6. 6. 6 Global Economics Global Real Estate Trends September 11, 2013 Canadian Residential Markets 2 3 4 5 6 7 8 90 92 94 96 98 00 02 04 06 08 10 12 % of disposable income Mortgage Interest Payments Source: Statistics Canada, Scotiabank Economics. Household Mortgage Debt Service 0 2 4 6 8 10 12 14 16 90 92 94 96 98 00 02 04 06 08 10 12 % 5-Year Conventional Prime Source: Bank of Canada, Scotiabank Economics. Residential Mortgage Rates 0 5 10 15 20 90 92 94 96 98 00 02 04 06 08 10 12 y/y % change Residential Mortgages Source: Bank of Canada, Scotiabank Economics. Residential Mortgage Credit 0.0 0.2 0.4 0.6 0.8 90 92 94 96 98 00 02 04 06 08 10 12 % of mortgages in arrears three or more months Mortgage Arrears Source: Canadian Bankers Association (CBA), Scotiabank Economics. Residential Mortgage Arrears Canada British Columbia Alberta Man.-Sask. Ontario Quebec Avg. Price Units Avg. Price Units Avg. Price Units Avg. Price Units Avg. Price Units Avg. Price Units Avg. Price Units 2007 307,089 521,016 439,119 102,805 357,483 70,954 171,526 26,468 299,544 213,336 207,531 80,647 158,589 26,258 2008 304,944 431,739 454,599 68,923 353,748 56,045 205,026 24,063 302,287 180,937 215,323 76,752 171,258 24,532 2009 320,342 464,962 465,725 85,028 341,818 57,543 215,814 24,181 318,313 195,737 225,368 79,108 182,640 22,844 2010 339,106 446,692 505,178 74,640 352,301 49,723 231,235 24,036 342,376 195,372 241,455 80,027 193,174 22,461 2011 362,716 458,636 561,304 76,721 353,394 53,756 246,659 27,075 365,980 200,558 252,145 77,171 201,009 22,912 2012 363,740 453,372 514,836 67,637 363,208 60,369 260,264 27,958 385,519 196,383 260,559 77,463 208,952 23,104 2013ytd 372,096 444,996 521,470 67,339 376,024 63,629 269,460 26,837 393,606 193,294 271,864 72,024 210,196 21,430 Vancouver Calgary Edmonton Ottawa Montreal Avg. Price Units Avg. Price Units Avg. Price Units Avg. Price Units Avg. Price Units Avg. Price Units Avg. Price Units 2007 570,795 38,978 414,066 32,176 338,636 20,427 377,029 95,164 273,058 14,739 250,213 43,666 216,339 7,261 2008 593,767 25,149 405,267 23,136 332,852 17,369 379,943 76,387 290,483 13,908 259,046 40,440 232,106 6,472 2009 592,441 36,257 385,882 24,880 320,378 19,139 396,154 89,255 304,801 14,923 271,677 41,753 239,158 6,062 2010 675,853 31,144 398,764 20,996 328,803 16,403 432,264 88,214 328,439 14,586 292,919 42,298 253,610 5,944 2011 779,730 32,936 402,851 22,466 325,595 16,963 466,352 91,760 344,791 14,551 307,462 40,357 260,950 6,119 2012 730,063 25,445 412,315 26,634 334,318 17,641 498,973 88,157 352,610 14,497 318,240 40,133 270,742 6,239 2013ytd 746,906 25,949 432,054 28,428 340,866 18,778 511,637 85,807 354,652 13,901 327,488 36,590 275,123 5,078 Source: Canadian Real Estate Association (CREA), QFREB, Scotiabank Economics calculations. Year-to-date data are expressed at seasonally adjusted annual rates. Home Sales Toronto Atlantic Halifax
  7. 7. 7 Global Economics Global Real Estate Trends September 11, 2013 Canadian Non-Residential Markets 0 100 200 300 400 00 01 02 03 04 05 06 07 08 09 10 11 12 13 index: 1999Q1 = 100 Institutional & Government Residential Commercial Industrial Source: Statistics Canada, Scotiabank Economics. Building Permits 0 2 4 6 8 10 12 14 00 01 02 03 04 05 06 07 08 09 10 11 12 13 % National Central Office Vacancy Rate Source: Cushman & Wakefield, Scotiabank Economics. Office Markets 0 1 2 3 4 5 6 7 8 00 01 02 03 04 05 06 07 08 09 10 11 12 13 % National Industrial Vacancy Rate Source: Cushman & Wakefield, Scotiabank Economics. Industrial Markets 0 2 4 6 8 10 12 14 00 01 02 03 04 05 06 07 08 09 10 11 12 13 % Montreal Toronto CalgaryOttawa Vancouver Source: Cushman & Wakefield, Scotiabank Economics. 0 2 4 6 8 10 00 01 02 03 04 05 06 07 08 09 10 11 12 13 % Vancouver Toronto Calgary Montreal Source: Cushman & Wakefield, Scotiabank Economics. Building Permits Total Res. Indust. Comm. Inst. & Gov’t 2007 74.4 45.5 5.0 17.0 6.9 2008 70.4 40.9 5.1 16.7 7.8 2009 61.0 34.7 3.9 13.8 8.6 2010 72.4 43.5 5.1 15.4 8.5 2011 74.0 44.5 5.2 16.3 8.0 2012 80.9 48.4 6.5 17.9 8.0 2013ytd 80.8 48.1 5.5 18.9 8.3 date data are expressed at seasonally adjusted annual rates. (C$ billions) Source: Statistics Canada, Scotiabank Economics. Year-to- Office Vacancy Rates Largest Five Markets Industrial Vacancy Rates Largest Four Markets
  8. 8. 8 Global Economics Global Real Estate Trends September 11, 2013 U.S. Residential Markets 0.0 0.4 0.8 1.2 1.6 2.0 2.4 90 92 94 96 98 00 02 04 06 08 10 12 mns of units, a.r. Single-Unit Multiple-Unit Total Source: U.S. Census Bureau, Scotiabank Economics. Housing Starts 0.0 0.2 0.4 0.6 0.8 1.0 1.2 90 92 94 96 98 00 02 04 06 08 10 12 mns of units, a.r. South West Midwest Northeast Source: U.S. Census Bureau, Scotiabank Economics. Housing Starts by Region 50 100 150 200 250 300 2 3 4 5 6 7 8 90 92 94 96 98 00 02 04 06 08 10 12 mns of units, a.r., 3MMA Unit Sales (Singles only) Average Price $, 000s,3MMA Source: National Association of Realtors (NAR), Scotiabank Economics. Existing Home Sales 100 150 200 250 300 350 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 90 92 94 96 98 00 02 04 06 08 10 12 mns of units, a.r., 3MMA Unit Sales Average Price $, 000s, 3MMA Source: U.S. Census Bureau, Scotiabank Economics. New Home Sales Total Singles Multiples West South Midwest North East Total Single Multiple (millions of units) (millions of units) 2007 1.355 1.046 0.309 0.321 0.681 0.210 0.143 1.398 0.980 0.419 2008 0.906 0.622 0.284 0.196 0.453 0.135 0.121 0.905 0.576 0.330 2009 0.554 0.445 0.109 0.117 0.278 0.097 0.062 0.583 0.441 0.142 2010 0.587 0.471 0.116 0.120 0.297 0.098 0.071 0.605 0.447 0.157 2011 0.609 0.431 0.178 0.132 0.308 0.101 0.068 0.624 0.418 0.206 2012 0.781 0.535 0.245 0.175 0.398 0.128 0.080 0.830 0.519 0.311 2013ytd 0.912 0.611 0.302 0.216 0.467 0.135 0.095 0.944 0.608 0.336 2013f 0.94 2014f 1.14 Year-to-date data are expressed at seasonally-adjusted annual rates. Housing Starts Permits Source: U.S. Census Bureau, Scotiabank Economics calculations and forecasts.
  9. 9. 9 Global Economics Global Real Estate Trends September 11, 2013 U.S. Residential Markets 2 4 6 8 10 12 14 16 90 92 94 96 98 00 02 04 06 08 10 12 % West South Midwest Northeast Source: U.S. Census Bureau, Scotiabank Economics. Apartment Vacancy Rates 2 4 6 8 10 12 14 90 92 94 96 98 00 02 04 06 08 10 12 months' supply, 3MMA Existing New Source: U.S. Census Bureau, National Association of Realtors (NAR), Scotiabank Economics. New and Existing Home Inventories 1 2 3 4 5 6 3 4 5 6 7 8 9 00 01 02 03 04 05 06 07 08 09 10 11 12 13 % 30-Year Mortgage Rate MBA Mortgage Application Index – Purchases Only index Source: Mortgage Bankers Association (MBA), FHLMC, Scotiabank Economics. Mortgage Rates and Applications -2 0 2 4 6 8 90 92 94 96 98 00 02 04 06 08 10 12 Consumer Price Index, y/y % change Owners' Equivalent Rent Rent of Primary Residence Source: U.S. Bureau of Labor Statistics, Scotiabank Economics. Housing Costs Total Avg Price ($000s) Months’ Supply West South Midwest North East Total Avg Price ($000s) Months’ Supply (sa) (nsa) (nsa) (million units, saar, unless otherwise noted) 2007 5.040 263.8 8.7 1.070 2.070 1.190 0.720 0.769 308.8 8.4 2008 4.110 240.4 10.0 0.990 1.590 0.950 0.570 0.482 288.9 10.7 2009 4.340 217.1 8.3 1.130 1.640 0.980 0.590 0.374 268.2 9.0 2010 4.190 220.2 9.0 1.080 1.630 0.910 0.570 0.321 271.5 8.0 2011 4.260 212.9 8.1 1.130 1.680 0.910 0.540 0.306 263.4 6.6 2012 4.660 224.0 5.8 1.160 1.840 1.070 0.590 0.368 285.4 4.8 2013ytd 5.056 241.2 4.9 1.211 2.014 1.183 0.647 0.440 313.2 4.4 Source: National Association of Realtors (NAR), U.S. Census Bureau, Scotiabank Economics calculations. Year-to-date data are expressed at seasonally-adjusted annual rates. Existing Home Sales New Home Sales
  10. 10. 10 Global Economics Global Real Estate Trends September 11, 2013 International Residential Markets Inflation-Adjusted Home Prices 0 100 200 300 400 96 98 00 02 04 06 08 10 12 1996=100 Spain France Source: Scotiabank Economics 0 100 200 300 400 96 98 00 02 04 06 08 10 12 1996=100 Australia Sweden Source: Scotiabank Economics 0 100 200 300 400 96 98 00 02 04 06 08 10 12 1996=100 Japan Germany Source: Scotiabank Economics 0 100 200 300 400 96 98 00 02 04 06 08 10 12 1996=100 Canada Source: Scotiabank Economics United States 0 100 200 300 400 96 98 00 02 04 06 08 10 12 1996=100 Italy Source: Scotiabank Economics Switzerland 0 100 200 300 400 96 98 00 02 04 06 08 10 12 1996=100 Ireland U.K. Source: Scotiabank Economics
  11. 11. 11 Global Economics Global Real Estate Trends September 11, 2013 International Residential Markets Source of nominal house price data: Australia: Price index of established houses, weighted average of 8 capital cities. Australian Bureau of Statistics. Canada: National average price of existing home sales. Canadian Real Estate Association (CREA). France: Price index of second-hand dwellings. National Institute of Statistics and Economic Studies (INSEE). Germany: Resale house price index. Bundesbank unpublished. Bank for International Settlements (BIS). Ireland: Average price of second-hand houses (before 2006). Irish Department of the Environment, Heritage and Local Government. Residential Property Price Index, all dwellings (from 2006). Central Statistics Office. Italy: Resale house price index, average of 13 urban areas (before 2011). Bank of Italy. House Price Index, new and existing homes, all dwellings (from 2011). Eurostat/Istat. Japan: Residential urban land price index. Japan Real Estate Institute. Spain: Average price of second-hand houses. Bank of Spain. Sweden: Real Estate Price Index, buildings for permanent living. Statistics Sweden. Switzerland: Price index for single-family homes. Swiss National Bank. United Kingdom: M ix-adjusted house price index, all dwellings. U.K. Office for National Statistics. United States: National average price of existing single-family home sales. National Association of Realtors. Russia: Average price per square metre, existing homes, all dwellings, urban areas. Federal State Statistics Office. Brazil: Residiential real estate collateral value index, all dwellings, urban areas. Central Bank of Brazil. Chile: New House Price Index (IRPV), Greater Santiago, all dwellings. Chilean Chamber of Construction. Colombia: New House Price Index (IPVN), all dwellings, 23 municipalities. National Administrative Department of Statistics (DANE). M exico: Housing Price Index (Indice SHF), new and existing homes, all dwellings. Sociedad Hipotecaria Federal. Peru: Price per square meter of apartments, Lima. Central Reserve Bank of Peru (BCRP). China: Sale price of second-hand residential buildings, Beijing. National Bureau of Statistics of China. India: Housing Price Index (NHB Residex), new and used homes, all dwellings, 15 cities. National Housing Bank. Indonesia: Residential Property Price Index, new homes, all dwellings, 14 city composite. Central Bank of Indonesia. South Korea: House Price Index, new and existing homes, all dwellings. Bank of Korea. Thailand: Housing Price Index, single-detached house (incl. land), Bangkok & vicinity, Government Housing Bank loans (before 2009). Bank of Thailand. Housing Price Index, single-detached house (incl. land), Bangkok & vicinity, Commercial Bank loans (from 2009). Bank of Thailand. International House Prices (Inflation-adjusted*, y/y % change) 2004 2005 2006 2007 2008 2009 2010 2011 2012 12Q3 12Q4 13Q1 13Q2 Australia 4.2 -1.2 4.2 9.0 0.1 1.7 9.1 -5.9 -2.5 -2.1 0.3 0.8 2.7 Canada 7.4 7.7 9.2 8.6 -3.1 4.7 4.1 4.1 -1.2 -1.5 -0.7 0.2 2.5 France 12.8 13.5 10.1 5.0 -2.3 -7.2 3.4 3.6 -2.6 -3.9 -3.7 -2.6 Germany -2.8 -3.9 -2.8 -1.2 -1.7 -0.2 0.9 2.5 3.6 .. .. .. .. Ireland 8.9 10.0 11.8 5.6 -9.0 -16.6 -11.6 -14.3 -14.7 -14.0 -7.9 -4.0 -0.9 Italy 3.8 5.5 3.6 2.9 -0.9 -1.3 -1.5 -2.2 -5.9 -7.1 -7.8 -7.8 Japan -6.2 -4.8 -3.6 -1.1 -2.6 -2.4 -3.1 -2.9 -2.7 -2.2 .. -1.6 .. Spain 15.3 11.2 6.5 2.6 -3.9 -7.3 -5.7 -9.2 -11.3 -12.4 -13.6 -11.0 -10.0 Sweden 9.0 8.6 10.8 8.2 -0.2 1.9 6.6 -1.9 -2.3 -1.9 2.2 2.7 3.3 Switzerland 1.6 -0.1 1.4 1.3 0.3 5.5 4.0 3.9 4.4 4.1 4.0 4.0 5.9 United Kingdom 10.5 3.4 4.0 8.6 -4.6 -10.0 4.0 -5.4 -1.2 -0.6 -0.3 -0.5 0.2 United States 6.3 6.1 -2.0 -5.0 -12.7 -9.3 -0.2 -6.4 3.1 5.0 7.1 7.6 8.0 Russia 17.1 10.9 38.4 35.3 10.3 -12.4 1.4 -29.3 9.9 10.3 10.3 -0.4 -2.2 Brazil 7.6 3.6 8.7 14.1 17.1 19.1 19.5 12.9 6.4 5.3 4.2 3.5 2.9 Chile .. -1.5 -5.2 -2.1 -2.1 0.4 1.9 5.3 2.7 2.3 4.3 6.6 5.5 Colombia 6.7 4.1 3.3 10.8 6.7 5.5 5.3 6.2 7.6 7.9 8.6 9.8 Mexico .. .. 3.0 3.6 -0.5 0.1 -0.3 0.8 0.7 -0.8 -1.2 -0.8 -0.5 Peru 7.0 -6.1 -4.1 2.4 22.1 14.1 9.4 13.7 18.1 16.8 15.3 China .. .. .. .. .. -1.0 1.7 -4.5 -4.8 -4.1 -2.0 3.8 10.2 India .. .. .. .. -0.7 -5.9 3.3 6.2 -2.2 -3.5 0.0 2.7 -1.6 Indonesia -2.1 -6.5 -7.8 -4.1 -7.3 -2.6 -2.3 -0.7 0.4 -0.2 2.4 5.7 6.5 South Korea -2.4 -2.0 3.9 6.6 -0.7 -2.6 -0.5 1.2 0.7 0.3 -1.4 -1.9 -1.9 Thailand 2.6 3.5 -0.9 -1.1 -6.6 5.2 -2.3 -0.7 -1.8 0.1 -2.0 1.5 3.8 * Nominal house prices deflated by national consumer price indices.

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