Top > Business > 2007 > January > 2007-01-04

Global Housing market going strong despite US slowdown

Even though the US housing market remains depressed at the end of the year, economic indicators from all over the world point to a healthy, stable, and still growing global housing market. One of the most robust booming markets in advanced economies over the last 10 years, investment in housing is still wheeling in very satisfying results of an international average of 10 percent. Last year`s rise is especially noteworthy as many national banks raised their interest rates to up to double the rates at the beginning of the year to curb inflation.

While the Federal Reserve Rate hike from 2.25 to 5.25 was widely regarded to be one of the main causes of the weak year in the US real estate market, a similar move by the European Central bank did not affect the booming Ireland and Spanish markets as strongly. Ireland house prices have more than trebled in the past decade and are still growing at 15 percent, whereas Spain dropped from 13 to a still healthy 10 percent. Canada, Norway and Sweden also shined with an annual house price growth rate of 10 percent.

In the US, where house prices have doubled over the past 10 years, analysts are expecting another weak year, but are confident that it would remain steady. Especially house prices in Detroit and Phoenix, Florida and California have continued to fall. This development even caused a downgrading in this year`s forecast for US economic growth. And still the boom described by the OECD as unique in its stability, steepness and global impact is set to continue.