Global property markets follow in step
I am a big fan of Twitter as my predominant news feed, far more a news media service than a social media service. It is easy to follow those people and organisations that are the pipe-fee of news that is contextual top whatever area of interest you hold. For me it all about property and the real estate industry in New Zealand and Globally.
It was through one of these followers that I saw this chart providing an interesting perspective on the comparative performance of US house prices over the past two decades on an index whereby December each year becomes the base for the growth / decline in house prices month by month through the year.
So for the US market which went through a major boom and bust in the past 20 years it is interesting to see that this year they are tracking to see close to the best growth in house prices (admittedly off a low base). The chart below shows the actual indicies of house prices across the major markets over that 20 year period.
Having seem this chart tracking the US cumulative change in house prices from December, I was naturally drawn to create a chart for the NZ market. Thanks to the data from REINZ Stratified Price Index I have (thankfully!)been able to produce a match as seen below:
It is quite striking the similarity between the US and NZ house price index - the worst performance year is matched at 2008, the US slipping further down 10% vs 7% in NZ, the best year is very close; NZ is 2003 at 13% with US 2004 with 11%.
This would certainly be a clear demonstration that whilst domestic property prices have a local market factor they do seem to follow in step to global economic effects that flow through to the property sector.