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Top Ten Hottest Real Estate Markets 2012

In many world markets, a sluggish economy has stymied growth in most public and private sectors. However, there are exceptions to the rule in many nations where growth continues, or specific industries have been able to weather the storm. Real estate has long been a safe bet for making money in investing capital, but it can be quite volatile if not in a prime market region.

Here are ten hot real estate markets that are fairing well, and have proven to be resilient to current economic woes:

 

10

Switzerland

5-year price growth: 27.5 percent 



This European destination in the Alps has beautiful scenery, clean cities, and warm people. It also is home to some of the most expensive cities to live in on the planet. All of this has fueled the speculation on properties, even during a greater European economic downturn. The average price per square meter in a prime property in Geneva was $31,900 in late 2011. This equates $3,000 per square foot!

9

Malaysia

5-year price growth: 28.5 percent

This Southeastern Asian nation has seen massive economic growth in the last 20 years thanks to a modernizing economy. This has led to higher wage earners and property values. Home prices are out-pacing economic and wage growth, which was at 6.6% in 2011 (compared to 5% for the economy). This has led to price speculation and an influx of foreign buyers, both of which the government is trying to crack down on by doubling the entry price minimum from $162,000 to $325,000. Average prices for properties in the capital, Kuala Lumpur are $5,000 per square meter or $500 per square foot.

7 (tie)

Norway

5-year price growth: 28.7 percent

Norway joins Switzerland as being the only two European nations making the top ten ranking for hot real estate markets.  Thanks to its vast oil reserves, Norway is weathering the economic recession in Europe. Its economy is set to grow 2.7% in 2012. This good fortune has led many people to buy property, which is causing prices to rise 6.8% over last year. Pair this with a government reduction in interest payments, and you have skyrocketing home values. In the small town of Stavanger, home prices have almost doubled in six years. This is leading to concerns about a housing bubble.

7 (tie)

Canada

5-year price growth: 28.7 percent

Despite the woes of its neighbor the US, Canada’s housing market has been fine throughout the Great Recession. Most of the growth has occurred in Ontario and Toronto, where high-rise condo projects are booming. Housing prices have risen an impressive 8.6% over last year. In Vancouver, the average cost for a unit has risen even more at 10.4%. It is speculated the influx of Chinese buyers has contributed to the price increase there. There are also rumblings of concern amongst Canadian officials that the housing market is growing at too fast a pace.

6

Taiwan

5-year price growth: 30.1 percent 


Taiwan is one of the world’s most densely population nations, which in turn has led to the large-scale development of large housing projects. The capital of Taipei is the heart of this country’s real estate market. Since 2006, property values have risen an impressive 30%, yet in 2011 the trend began to move downward. This stems in part from the government implementing a strict ‘flip tax’, which prevents buyers from trying to speculate on properties by buying and then selling their purchases almost immediately. The current minimum ownership period is two years, or be forced pay a 10%-15% tax.

5

Colombia

5-year price growth: 39.4 percent

This country in South America is the only one from the continent to make this list. Thanks to a 6% growth in GDP last year, property buying among Colombians is on the rise. Lower crime rates have also helped spur foreign development and grow the country’s business stature. Last year was the slowest for price growth at 3.9% in five years, but signs of a spike in foreign investment have analysts expecting a continued upward trend.  New home sales were already up 19% in the first half of 2012.

4

Singapore

5-year price growth: 50.5 percent 


Singapore has long been an expensive housing market in Southeast Asia. It places only behind Hong Kong and Tokyo as the most expensive real estate market on the continent. A large foreign-born population helps contribute to expensive unit prices. One third of Singaporeans are foreign, and made up 18% of the market for new homes purchased in the city last year. Chinese also are responsible for a large number of purchases. The average price per square meter in 2011 was $25,600, or $2,600 per square foot!

3

Israel

5-year price growth: 54.5 percent

Israel has been the world’s third hottest real estate market since 2009. Prices rose by 21% in 2009, followed by 16% in 2010. There was such widespread concern over the rising cost of housing that the country had a series of protests in 2011 citing concern over the affordability of properties. The government tried to cool the market and was successful last year as values dropped slightly. But in 2012, banks once again lowered interest rates for mortgage loans, and activity has once again skyrocketed. There are no signs this property market will slow any time soon.

2

Hong Kong

5-year price growth: 93.7 percent 



Hong Kong has long been notorious for being one of the most expensive cities for property in the world. In 2011, the city finally beat out London for having the highest office rental rates of any city globally. The average price of a home in prime areas was about $47,500 per square meter or $4,400 per square feet in 2011. China’s rise as well as a large number of new, wealthy Chinese has fueled the real estate boom in this semi-autonomous enclave.  30% of property sales in Hong Kong are Chinese buyers.  
This too has led to a speculation bubble, with the government responding by charging a 10% tax on anyone buying a house that is not a Hong Kong resident. Prices have slowed in 2011 and 2012, but continue to rise.

1

China

5-year price growth: 110.9 percent 



It should be no surprise that China is the hottest real estate market in the world, and has been for a few years. A house in Shanghai costs $19,400 per square meter or $1,800 per square foot from 2011 estimates. Beijing comes in slightly cheaper, at $17,400 per square meter or $1,600 per square foot. 
The government has been fighting real estate speculation for years and only recently has seen their actions yield a slight drop in property values. Any buyers must hold a property for at least two years before trying to sell, and there are attempts to cap investors from buying too many housing units. Despite all this, most homes are still unaffordable for many Chinese. This is of great concern economically.  Yet strong sales and construction continue, as there is hope the large population and a rising middle class will continue to help mend the issue on its own.

 

More from the source article: CNBC