Demand for Homes in US Rises More Than Expected in May

The demand for new homes in the United States increased more than expected in May, and mortgage rates have dropped, helping boost the residential property market. This is just as well as other parts of the economy are cooling. Purchases for May reached an annual rate of 369,000, which is the highest since April 2010 and is 7.6% more than the previous month.

The number of houses on the market is steadily reducing. It's likely that the reduced cost of borrowing will help boost buyers' confidence. The Federal Reserve recently extended a program designed to keep long-term interest rates low with the aim of reducing unemployment and preventing a global slowdown from stalling the property market.

The median sales price has increased by 5.6% compared to the same month last year to reach $234,500, and prices have increased since February which is the best performance in five years. Purchases rose by 37% in the North East, and by 13% in the South, but demand dropped by 3.5% in the West, and by 11% in the Midwest.

Last month there were 145,000 newly constructed houses on the market, up slightly from the record low of 144,000 recorded for March and April. The supply of new homes on the market dropped to 4.7 months, which is the lowest since October 2005. Due to growing demand builders broke ground on 516,000 single-family homes in May, up 3.2% from April. Although economists are optimistic about the latest news, they still caution that there is a long way to go before the market returns to anything sort of normality.

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Canadian Residential Property Sales Declined in May

Canadian residential property sales declined last month, and were
down by 3.1% compared to April, according to data from the Canadian
Real Estate Association. This is the first monthly decline since the
beginning of the year, but activity levels were still slightly above
the five and 10 year averages for May, showing the housing market is
still in reasonable shape.

The average price for a house sold last month was $375,605. This
is a 0.3% decline compared to May 2011, and although the national
average has remained pretty flat since last spring, sales prices have
increased in seven out of ten local Canadian markets.

Toronto is still Canada's most active housing market, and property
is selling quickly, but sales and average prices are also up in
Calgary compared to May last year. In comparison the rest of the
market in Canada has seen only modest growth, and market conditions
remain balanced. The number of newly listed homes has changed little
during the past three months, and listings were up just 0.3% compared
to April.

The number of new listings for the month was static in 49 markets,
and eased in 52 markets. The new listing to national sales ratio,
which is a measure of market balance, was 53.4% in May, slightly down
from April when the reading was 55.3%. National inventory levels were
at 5.9 months at the end of May, which is a slight increase on
April's 5.7 months. Experts consider housing supply and demand in
Canada to the balanced.

Property in South-East Asia Set to Boom

According to Jones Lang LaSalle, the property markets in Southeast Asia could begin to boom. The firm believes there are several factors which will influence the markets, including growing affluence and urbanisation in these countries, which will result in an increased demand for housing as well as commercial property and infrastructure.

In addition this should lead to increased tourism both from within the region and outside, and it's expected there will be considerable demand for property in developing countries such as Laos and Myanmar. here should also be an increased demand for hospitals and clinics, as more these affluent societies begin to focus on improving health.

Education is another sector expected to see increased demand, as there will be an additional need for schools and colleges as well as the associated housing and infrastructure.

However Jones Lang Lasalle has pointed out changes will need to be made to land ownership laws in order to encourage investment. This means there will be a need for increased transparency and professionalism within the property sector. At the moment there are a number of differences between the countries regarding foreign property ownership, and these need to be managed more efficiently in order for opportunities to be maximised.

Economies such as Laos and Cambodia have only recently opened up, and although there are numerous business opportunities investors need to feel confident about conducting transactions in such countries. If these difficulties can be ironed out then the property market can develop more quickly, and more money can be invested into countries in South-East Asia.

Danish Property Market Could Get Worse Before It Gets Better

The property market in Denmark could get worse, as property values are dropping, the jobs market is growing, and private levels of debt are high. House prices in Denmark have declined by 25% since their peak in 2007, and the government has predicted prices will fall by a further 5.5% this year.

In March, property values fell by an annual rate of 8.6%, according to Statistics Denmark, so at least the decline is slowing. Unemployment is being predicted to rise to 7.6% this year, up from 7.4% last year according to the Organisation for Economic Corporation and Development.

According to Moody's, this combination of factors has left many households vulnerable. It estimated private debt levels reached 142% of GDP at the end of 2010. This rate is twice the European Union average of 79%.

Moody's has downgraded nine Danish financial institutions, and the financial crisis has claimed five banks since 2011. In spite of this Denmark is still one of only 12 nations to hold its triple A rating, and has emerged as something of a safe haven due to its fiscal discipline.

Denmark has a current account surplus, and last month the government cut the budget deficit target to 3.8% this year, and 1.7% for 2013. In comparison the average deficit in the European Union is 3.6% for 2012, and 3.3% for 2013.

Although Denmark is being seen as a safe haven, Moody's is cautioning investors against assuming it's immune from the debt crisis in Europe. It points out that although Denmark still has its own currency the Danish banks and economy is exposed.

The Danish economy is relatively strong in comparison with other countries in Europe, and this should mean household debt levels decrease in the future.

Peruvian Property Market Continues to Perform Strongly

The property market in Peru has been performing strongly for a couple of years, and this is largely due to strong economic growth in the country. In 2010 GDP grew by 8.8%, while in 2011 it grew by 6.9%.

According to figures from Peru Tinsa, the average price of homes sold in the Lima metropolitan area increased by 19.9% last year to reach $99,449. Residential sales increased by 52.2% in 2011 compared to 2010, and there was a 31.57% increase in the area sold.

All the indications are that the property market will continue to perform strongly this year due to lower mortgage rates, the strong economy, and improved public investment. Most of the new developments are concentrating on higher end property, but the best-selling homes in Lima are priced between $30,000 and $50,000.

By January this year Peru had seen 29 consecutive months of economic expansion, as GDP was up 5.38% compared to the same period last year, and is predicted to grow by 5.7% this year. Much of this increase is due to the strength of the Chinese economy, as the demand for raw materials such as copper is huge.

Peru has made sure that its export market remains competitive, as the Central Reserve Bank of Peru has intervened to make sure the currency doesn't appreciate too much. Last year saw the inauguration of Ollanta Humala, as the 94th president of Peru, and though there were initial concerns as to how he would lead the country, it seems as if he is following the same democratic and highly successful path as the Brazilian president. This means he is dedicated towards modernising the economy while maintaining a strong social commitment.

Property Prices in the Ukraine Rise Unexpectedly

Property prices in Kiev, the capital of the Ukraine rose unexpectedly during the year ending April 2012, but experts are doubtful as to whether this increase is sustainable, especially as the economy is slowing down. During the last year the average price of an apartment in Kiev increased by 28.9%, but is still 30% less than the peak of the housing boom in 2008.

In November last year property prices rose by 25.7% year-on-year which was something of a surprise as they had declined for nearly 3 years. However prices declined during the following months. The housing boom in the Ukraine took place between 2005 and 2008, and was mainly due to strong economic growth and interest from foreign buyers.

The boom was encouraged by the President, and as a result property prices increased by more than 1000% between the second quarter of 2000 and the second quarter of 2008. Between 2000 and 2007, GDP grew by an average of 8% annually.

Most of the properties bought by foreign buyers were purchased by Canadians, Kiwis, British, Emiratis and Cypriots, as well as some Americans. Properties were also brought by wealthy Ukrainians, and the average price rose to well above anything that could be afforded by the average resident. In late 2008 this foreign demand dropped off sharply due to the global crisis.

Domestic demand also decreased as Ukraine's main export is steel, and the need for this commodity collapsed. As a result GDP contracted by 15% in 2009. Since then the economy has expanded by 4.1% in 2010, and 5.2% last year. The Ukraine is quite an attractive proposition, as the economy is in relatively good shape, and the cost of buying a property is low. Ukraine also has the advantage of having good rental yields, and the laws are in favour of landlords.

Property Investors Becoming Increasingly Interested in Italy

According to a recent report, property investors are becoming increasingly interested in purchasing homes in Italy, and the current climate is especially good for British investors due to the strength of the pound against the euro.

Last year Umbria and Tuscany were especially popular amongst international buyers, and the regions saw increased activity. Most of the buyers were from the Eurozone, from Luxembourg, Belgium and the Netherlands. This year is likely to see something of a reversal due to the decline in the Euro.

During the last year or so the number of buyers looking for property in Italy has increased substantially, although prices of luxury homes in Tuscany and Umbria dropped by nearly 5% which is thought to be due to the weak global economy, and the Eurozone debt crisis.

Most international buyers are interested in luxury properties priced between €5 million and €15 million, as well as those at the lower end of the market price between €500,000 and €1.5 million. New properties coming onto the market are being priced accurately which is increasing buyer confidence, as well as helping to promote these areas as being some of the best residential property markets in Europe.

Tuscany and Umbria have traditionally always been popular amongst the British, and property in Umbria tends to be slightly cheaper than Tuscany. However Chianti is becoming increasingly popular as it is a picturesque rural area. Other areas attracting interest include Florence and Val d’Orca. Property prices in Italy are expected to remain largely stable this year, and there's no chance of a property glut as new developments are tightly regulated so demand will be higher than supply.