Property prices have been soaring for several years now in many OECD cities. A few markets, in UK and US cities for instance, have seen some cooling.
But in Dublin, the most expensive city for average house prices in our chart, the boom continues: Irish house prices grew by 11.8% in 2006, compared with 9.3% the previous year, despite a slowdown in the second half. This has led to concerns about inflation and personal debt, not to mention difficulties for first-time buyers.Madrid is another city where house prices have risen sharply in recent years; indeed, the latest OECD Economic Survey of Spain, issued in January 2007, calls for stabilising measures, as prices throughout the country have doubled in real terms since 1998. Housing prices in Brussels were around a third of Madrid or Dublin in 2004.Meanwhile, the “old” financial centres of London, Milan, Paris and New York still lead the way when it comes to sales and rental prices of downtown apartments. Some surveys go beyond comparing cities by focusing on streets. One 2006 ranking of prime retail streets by US-based property firm Cushman & Wakefield puts New York’s Fifth Avenue on top for rental values, followed by Causeway Bay in Hong Kong, China, the Champs-Elysées in Paris, New Bond Street in London and Ginza in Tokyo, with Dublin’s Grafton Street keeping up in sixth place.References:
©OECD Observer N° 260, March 2007
- Rae, David and Paul van den Noord (June 2006), “Ireland’s Housing Boom: What has driven it and have prices overshot?” OECD Economics Department Working Paper No. 492, available under Publications and Documents at www.oecd.org/economics
- See Cushman & Wakefield Inc. real estate website at www.cushwake.com