By Kate Youde
Five property stories making global headlines:
Munich leads bubble risk
Munich heads a list of seven global cities at risk of a property bubble this year, according to UBS. The bank’s annual Real Estate Bubble Index ranked the German city as most vulnerable, ahead of Toronto, Hong Kong, Amsterdam, Frankfurt, Vancouver and Paris. Bloomberg reported that a further 12 cities including London and New York are considered “overvalued”. Four cities — Singapore, Boston, Milan and Dubai — are “fair-valued”, while Chicago is deemed to be “undervalued”.
Call for action on European house prices
Meanwhile, about half of Europe’s housing markets are “back to pre-crisis peaks”, Francesco Mazzaferro, head of the secretariat at the European Systemic Risk Board (ESRB), told the FT. The ESRB, responsible for monitoring the EU financial system, has urged 11 countries to act to reduce risks posed by rising house prices. Price growth in Europe is outpacing that of wages and gross domestic product.
Hong Kong suffers further fall
Prices for private homes in protest-hit Hong Kong dropped for the third month in a row in August, government figures show, as social unrest and the trade war between China and the US affect the economy. The fall of 1.37 per cent, the biggest monthly decline since December 2018, followed decreases of 0.1 per cent and 0.3 per cent in July and June respectively. Reuters reported that Derek Chan, head of research at property agent Ricacorp, predicts a further fall of about 2 per cent in September.
Manhattan apartment prices plummet
In New York, prices for Manhattan apartments fell to their lowest in four years in the third quarter of 2019 following the introduction of a higher state transfer tax on prime property in July. Research by the Wall Street Journal found that the median price fell 25 per cent to just over $1m , the lowest level since 2015. The drop came after a rush of sales before the tax led the median price to rise 19.3 per cent to nearly $1.4m. Sales of apartments costing $2m — the threshold at which the tax applies — or more fell to their lowest level since 2011.
UAE city is on brand
Dubai will replace New York as the global capital for branded residences by the end of the year, according to a report by Savills. Website ME Construction News reported that the number of branded residential schemes globally has grown by 195 per cent in a decade to 430. Hotels, which are behind 96 per cent of projects in the pipeline, lead the expansion of the sector.