Global Home Prices Update [Housing Tracker]

Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.

U.K. Housing Market `on Its Knees' Amid Crisis, Rightmove Says. “U.K.'s biggest mortgage lender Rightmove Plc: UK house prices fell for a fourth month in September… The average asking price for a home fell 1% from August to 227,438 pounds ($414,000). From a year earlier, prices fell 3.3%.” (Bloomberg, Sept. 22)

Homebuilders Facing Decline In Profits This Year. “Conference Board of Canada: Rising labor and material costs as well as a continued cooling in the housing sector will rip into profits of Canadian homebuilders for a second consecutive year. As demand for new-home construction weakens, profits this year are expected to dip by 3% compared with a year ago to $3.6 billion. This follows a 16.4% year-over-year plunge in 2007. The Conference Board report said profits will drop another 6.6% to $3.3B in 2009 before swinging upward in 2010 through to 2012.” (Montreal Gazette, Sept. 22)

Plunge In House Prices Outstrips The Crisis Of The 1990s. “HBOS, which has just been taken over by Lloyds TSB, will [report] next month… the decline from last year's peak now exceeds the fall during the 1990s. From the [peak] in May 1989 to the bottom in February 1992, the bank's seasonally adjusted index of prices fell by 13.1%. That fall has already been exceeded since the market peaked last August… The speed of this crash is consistent with predictions that the market will fall by 25%-30% before bottoming out, possibly in 2010. That would make this slump deeper than in the 1990s but shorter. Prices fell 10.9% Year-to-date in August.” (Independent UK, Sept. 21)

Italy's Aedes, Sopaf In Talks About Stake Purchase. “Italian property company Aedes said it would talk with investment company Sopaf about selling it a stake to help shore up its finances… Aedes [is] suffering from a market slump stemming from the U.S. subprime lending crisis.” (Reuters, Sept. 18)

Japan Land-Price Declines Quicken on Lack of Credit. “Ministry of Land, Infrastructure Transport and Tourism: Land prices in Japan fell by 1.2% in the twelve months through June, with the rate of decline accelerating… as lenders tightened credit after the U.S. subprime market collapse. Land prices in the nation's three major metropolitan areas, more resilient compared with rural districts, rose at a slower pace than in the previous year. Japan's real estate market stabilized in recent years after being locked in a slump for more than a decade through the 1990s. The outlook for the market has now turned severe, said Hiromichi Iwasa, CEO of Mitsui Fudosan Co., Japan's largest developer.” (Bloomberg, Sept. 18)

U.K. Homebuilders Advance as Short Positions Closed. “Persimmon Plc, the U.K.'s largest homebuilder by value, led rivals higher in London trading after Lloyds TSB Group Plc rescued Britain's biggest mortgage lender, spurring investors to buy shares to close short positions. Persimmon… closed 9% higher [Thursday while] Taylor Wimpey added 3.3% to £0.47… Lloyds TSB agreed to buy HBOS Plc for about £12.2 billion ($22.2B) as the government backed a deal to keep the lender from succumbing to the worsening global credit crisis.” (Bloomberg, Sept. 18)

Perth Office Space Market, World's Tightest, Hit by Subprime. “Perth, the world's tightest market for office space, may see projects that would alleviate the West Australian state capital's commercial real estate shortage derailed by the subprime crisis. Almost a third of the 413,000 square meters of office space set to be available in Perth by 2012 might be canceled or delayed, Colliers International said in a report, blaming tighter financing requirements.” (Bloomberg, Sept. 17)

Brazil, Mexico Homebuilders Drop on Credit Concerns. “Brazilian and Mexican homebuilders tumbled [last week] on Latin American stock exchanges on concern that the global financial crisis will raise the cost of capital while slowing growth and accelerating inflation slow demand for homes... Corporacion Geo SAB paced the retreat in Mexican builders, falling the most in almost eight years. The Habita index of six Mexican homebuilders slid to the lowest since November 2005. Homebuilders in Latin America fell on concern credit market declines will curb mortgage lending as economic growth slows and inflation cuts into consumers' buying power.” (Bloomberg, Sept. 17)

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Comments

[WAKEUP:]

"...the market will fall by 25%-30% before bottoming out possibly in 2010." Why is the bottom prediction always just far enough into the future that most people will have forgotten the prediction by the time it is proven wrong? The bottom will not be in until income is sufficient to match prices. That will not happen for at least another 7 - 8 years, if then.

2008 Sep 22 08:45 PM