With Thursday’s story about the Bay Area being the priciest place on the planet to build structures like apartments, schools and office buildings, we wondered how real estate looks in other places far away from our region and its nose-bleed cost of living.
Here in the Bay Area, residents obsess so much on how expensive property is that we tend to forget that cities, states and nations around the world each experience their own real-estate highs and lows, joys and sorrows.
Let’s step out of our cost-of-living snobbery and take a look at some of those places, far from the Golden Gate:
Addis Ababa, Ethiopia
The sprawling capital and largest city in Ethiopia sits in the country’s highlands bordering the Great Rift Valley and serves as the nation’s commercial and cultural hub. According to Expatistan.com, the monthly rent for a furnished 900-square-foot home in an “expensive” neighborhood will cost you a tad over $1,000. And a mansion listed in the Ezega real estate site and sitting beside an exclusive golf course is on sale for about $546,000.
Just a few years ago, wrote realtor Jana Mora with Tracon Real Estate, the country was undergoing an explosive real-estate boom. “The housing price in Ethiopia has soared to the roof,” he wrote in late 2014. “As a matter of fact, we are witnessing the biggest escalation of prices that we have ever seen in the history of Ethiopia. Is this a sign of future growth and transformation or just another bubble waiting burst? For the past 5 to 7 years I, just like as many other Ethiopians, have been looking into exercising the idea of acquiring a residential property in Ethiopia. My search for a viable and fair property price was met by utterly absurd and ridiculous figures. … On the flip side, I reckon that real estate builders and agents … in Ethiopia are in a rush to increasing the real estate price sky high as if they are playing a game called ‘Catch us if you can.’ As a result, housing price is soaring extremely high specially in and around the outskirts of Addis Ababa and according to peoples account and testimonials — just in recent years alone — the real estate price in Ethiopia has jumped to a staggering and unbearable level.”
A report last month in the global-legal site Lexology said: “Ethiopia’s prime minister, Dr. Abiy Ahmed — the youngest African leader at 42 years old — has initiated a series of unprecedented economic and political reforms in his first 12 months in office. The core challenge that he faces is moving the economy from state-led to market-based growth while overseeing far-reaching political reforms. Success is far from guaranteed but his accomplishments so far have created an enormous sense of opportunity within the country.”
The report also says that Ethiopia has been one of the continent’s best economic performers, “growing at a rate of 10 percent for the past 15 years.” While the country builds dozens of “Chinese-inspired industrial parks,” an Abu Dhabi real estate developer plans to invest $2 billion in a mixed-use development in the capital city of Addis Ababa that will include the construction of more than 4,000 residences.
According to the Global Property Guide, Norway’s housing market is now stabilizing after nearly eight years of uninterrupted growth. Demand for homes is stable, new construction activity is weak and the country’s homebuyers must deal with relatively new and stricter mortgage rules put into place in 2017. The report says nationwide house price index rose by 2.27% during 2018, after year-over-year rises of 0.73% in 2017 and 10.09% in 2016. In Bergen, which includes the World Cultural Heritage site of Bryggen at its harbor, the house price index rose slightly by 1.51% year over year (but dropped 0.59% inflation-adjusted), an improvement from a 2.07% decline in 2017. In some parts of the country — such as the capital, Oslo — it’s now relatively less expensive to buy a house than to rent one. In Norway, “while the house price index (HPI) rose by 29.3% from 2012 to 2018, the average monthly rent rose between 42.8% for one-bedroom dwellings and 36.7% for dwellings with five or more bedrooms, based on the figures from Statistics Norway.”
Founded in 1804 as a penal colony, Hobart is Australia’s second-oldest capital city after Sydney and offers waterfront living that’s more affordable than on the mainland. Perched along the Derwent River estuary on the island of Tasmania, Hobart is a cultural wonderland whose residents enjoy a steady stream of cultural activities, festivals and food-and-wine events. Hip young professionals have been buying local properties near the water, and artists and musicians have moved into a mix of old and new properties that include converted warehouses and factories right next to modern apartment buildings and refurbished mansions. A report at RealEstate.com.au says that median prices over the past year range from $673,500 for houses to $630,200 for units. Based on five years of sales, according the report, Hobart has seen a compound growth rate of 6.1% for houses and 9.4% for units.
This historic outpost in the center of the country served as the seat of Nguyen Dynasty as well as the national capital from 1802 to 1945. Its vast, 19th-century Đại Nội Citadel, surrounded by a moat imposing stone walls, circles the Imperial City, which is bejeweled with shrines, temples and palaces.
A report this year in AsiaPropertyHQ describes Vietnam’s real-estate market as one of Southeast Asia’s most “thriving and fast-growing,” a dramatic turnaround from from a housing bust in 2009 and eventual recovery in 2013. Since then, it’s been solid and red-hot growth, thanks to factors including strong GDP growth, eased foreign ownership regulations since 2015, more manufacturing and tourism trade and declining mortgage rates. “Vietnam is a quickly emerging economy that’s been growing with over 6% annually since 2000,” according the report. “At the same time, the GDP per capita has increased sixfold, from USD 388 in 2000 to USD 2,350 in 2017. This quick surge in individual wealth has made property affordable for many Vietnamese people, contributing to an increase of new developments and a boost in property prices.”
The website Expat features a number of properties near the railway station for rent. One three-bedroom private house in the centre of Hue city near the Da Vien bridge is “walking distance to many coffee shops and restaurants at Dien Bien Phu street, Ton That Tung street, in a safe and quiet area, 2 steps close to small market.”
Here’s a description of the house, which rents for $500 a month: “The house is in modern & traditional style, ground floor has one big living room with sofa and big TV, close to nice & big kitchen with dining tables and chairs, has 1 air-conditioned bedroom, next is big toilet with big bath room. There are 2 beds rooms upstairs (1 empty room and 1 full set up bed room with fan), one study room, fully furnished (hot water machines, a washing machine, a fridge, beds & mattresses, dining tables and chairs, sofa, hangers, TVs, internet connection available). Available from now for long term rental.”
This picturesque harbor town in western Crete has long been a playground for the rich and famous, many of whom could not resist buying property. According to the real-estate site Grekodom, prices in this part of Crete start from $170 per square foot. A quick peek at their listings brings up a small ”maisonette” for $22,000, an ”historical stone house with renovation permit” that was built in – ready for this? – 1550 for $43,000 and a 1920s home surrounded by olive groves and offering “spectacular views” for only $78,000. The Euroland website says that prices can differ greatly depending on which part of town, older and historic vrs. newer and suburban, you buy in. In recent years, it says, “the district of Halepa begun to grow to the east of the city and used to be home for the local aristocracy. Today Halepa is an area that attracts buyers of the upper social class of the market in the real estate in Chania. Apart from the previously mentioned older districts of the modern part of the town, several new residential areas have been developed during the 20th century, like Agios Ioannis, Koumbes, Lentariana etc. Some part—but not the biggest—of the city centre is dominated by colourless medium-height block buildings, typical of the urbanization period of Greece (1950–1970). However, there are still some beautiful neoclassical houses especially at the eastern part of Chania and some of the neighbourhoods surrounding the centre are quite picturesque.”
A report last year in the European Journal of Marketing and Economics said that the real-estate market is the most important branch of Albania’s economy. The report, which studied the market in the capital city of Tirana, drew data from the World Bank, the Institute of Statistics, Bank of Albania Reports along with other sources and it looked at the period from 2005 to 2016, finding that an apartment of 30 square feet in Tirana, which has the highest prices in the country, costs an average of $85,000. By comparison, the same unit would cost $188,000 in Prague, $120,000 in Berlin and $296,000 in Rome.
“The level of housing prices in Albania and other Eastern European countries is considerably low,” says the report, adding that “that does not mean it is easier for an investor in these countries to provide funds for buying a residential apartment, rather, given the very low income conditions, this investment becomes quite difficult.”
The report concludes by saying that real-estate prices have increased rapidly in recent years in Albania, influenced by factors that include the growing income of the population which “would increase the demand for real estate and therefore the selling prices of real estate.” On the other hand, prices in Albania have been tempered by other factors: an increase in the number of construction permits the past two years is expected to “increase the stock of real estate, and an increase in the stock would inevitably lead to a reduction in the selling price.”
Finally, the study’s authors believe that currently, the real estate market in Albania is in a bubble stage because the prices and stock of assets are very elevated. “The real estate market in Albania is very complex,” they say. “This complexity can be caused by many factors such as informality, the government’s lack of regulatory capacity, and uncontrolled population migration to the capital and the coastal cities as Tirana, Durres and Vlora.”
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