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Fitch: Global Home Prices to Rise in 2017, Despite Government Measures
February 16, 2017 / 12:46 PM / 10 months ago

Fitch: Global Home Prices to Rise in 2017, Despite Government Measures

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Global Housing and Mortgage Outlook - 2017 here LONDON/NEW YORK/SYDNEY, February 16 (Fitch) Fitch Ratings says in its latest Global Housing and Mortgage report that while the rate of home price increases is likely to slow in 2017, continuing government macro-prudential efforts to dampen unsustainably rapid price rises, such as mortgage lending restrictions, are being overpowered by a fundamental excess demand for home purchases. "Home purchases in many countries continue to become increasingly expensive relative to household income and rents, driven by the combination of extremely low borrowing costs, readily available credit, steady economic growth and limited housing supply. These conditions look set to remain in place this year," said Andrew Currie, Managing Director, Structured Finance, Fitch. Fitch has a Stable or Stable/Positive outlook for the housing and mortgage markets for 19 of the 22 countries covered by the report. Despite this, unsustainably rapid price rises in some countries such as New Zealand, Norway and Canada are expected to moderate in 2017. For the first time, Fitch's report covers China's housing market, where home prices in China's largest cities rose by 25% in 2016 and Fitch predicts the outstanding mortgage balance in 2017 will be more than three times higher than the 2012 volume. However, in contrast to many markets, Chinese authorities directly control many aspects of housing and mortgage markets. As a result, Fitch expects 2017 price rises of only 2.5% in the largest cities, partly in response to tougher rules on home purchase and minimum loan deposits. In North America, US home prices and delinquencies are back at 2006 levels, a decade after the subprime crisis began. Loans originated post-crisis maintain their strong performance and prices are supported by fundamentals, although some sub-markets are overheated. In Canada, household debt, reached a new high of almost 168% of disposable income in 2Q16 and, for the first time, breached 100% of GDP and is higher than the UK and US household debt burden. There are only four markets covered by the report experiencing falling home prices and in Europe the legacy of the financial crisis continues to fade. Italian home prices are expected to stabilise after years of declines, leaving Greece as the only European country with falling prices. In the UK, Brexit-related uncertainty and stretched home purchase affordability will halt UK home price rises in 2017. Fitch's "Global Housing and Mortgage Outlook - 2017" is available at the above link and videos discussing the regional highlights are available here: Global Housing and Mortgage Outlook - EMEA here using-and-mortgage-outlook---emea?autoStart=true Global Housing and Mortgage Outlook - APAC here using-and-mortgage-outlook---apac?autoStart=true Global Housing and Mortgage Outlook - North America here using-and-mortgage-outlook---north-america?autoStart=true Contact: Andrew Currie Managing Director +44 20 3530 1447 Fitch Ratings Ltd 30 North Colonnade London E14 5GN Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com; Athos Larkou, London, Tel: +44 203 530 1549, Email: athos.larkou@fitchratings.com; Sandro Scenga, New York, Tel: +1 212-908-0278, Email: sandro.scenga@fitchratings.com; Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available at www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. 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As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. 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