Amidst all the complaints about our high property prices relative to our incomes, it’s refreshing to note that depressed housing markets are even worse. When house prices are low, most of the time it means the economy is sluggish and unemployment is high. So, when house prices are moving up, thank your lucky stars. It means the economy is chugging along nicely and your job is safe.
Check out 11 of the world’s worst housing markets below but they are also great investment opportunities. Buy low and sell high.
#11 Czech Republic
Annual Change: Down 3.0%
Q4 2010 Change: Down 0.9%
Outlook: Unemployment is continuing to rise, wage growth is weak, and yet the central bank may raise rates,
according to board member Pavel Rezabek; weak.
#10 Spain
Annual Change: Down 3.5%
Q4 2010 Change: Down 0.4%
Outlook: Spain continues to struggle with a banking sector crisis driven by impaired balance sheets as a result of the country's housing market collapse. This, coupled with unemployment over 20%, will keep the market weak for some time.
#9 Japan
Annual Change: Down 3.6%
Q3 2010 Change: Down 0.8%
Outlook: Japan's economic growth should boom in the latter half of 2011, as a result of reconstruction. With many people displaced as a result of the disaster, there may be higher demand for new and existing homes, which could drive up prices.
#8 Portugal
Annual Change: Down 4.0%
Q4 2010 Change: Down 1.2%
Outlook: Portugal's growth remains sluggish and its unemployment high. Foreign demand seems the most likely source of growth for the country's real estate sector.
#7 United States
Annual Change: Down 4.1%
Q4 2010 Change: Down 2.1%
Outlook: The U.S. is in the midst of a double-dip in its housing market. Data
does not suggest there will a rebound anytime soon.
#6 Greece
Annual Change: Down 6.0%
Q4 2010 Change: Down 0.7%
Outlook: In the midst of heavy austerity cuts, Greece is seeing
unemployment boom. The country is in the midst of a long-term restructuring while in receivership of aid from the EU and IMF. As such, no rebound in the housing market should be expected, unless foreign demand picks up suddenly.
#5 Dubai, UAE
Annual Change: Down 6.1%
Q3 2010 Change: Down 6.1%
Outlook: Prices continued
to fall in Q1. There is some suggestion that
supply is in decline, so prices could pick up as a result.
#4 Croatia
Annual Change: Down 7.2%
Q4 2010 Change: Down 0.9%
Outlook: Unemployment is
on the rise, the country's economy shrank last year, and people are
protesting against the government. Likely not good.
#3 Ukraine
Annual Change: Down 7.8%
Q3 2010 Change: Flat
Outlook: Consumer
confidence is in decline, the inflation rate is improving, but still high. Growth, however, is
looking good. So this market may turn around in 2011.
#2 Lithuania
Annual Change: Down 10.1%
Q3 2010 Change: Down 3.9%
Outlook: GDP growth is expected to be
at 5.8% in 2011, but the country is still recovering from a housing bubble.
#1 Ireland
Annual Change: Down 10.8%
Q4 2010 Change: Down 3.5%
Outlook: Growth is expected to be weak as austerity measures persist. The banking sector is still in terrible shape. This does not look likely to improve anytime soon.
Source: Knight Frank
