ZEPPELIN’S GLOBAL HOME INDEXES (based on 4Q 2008 data)

Welcome to our Global Home Indexes webpage! These indexes are created with one thing in mind and this is to give Hong Kong home owners a rough sense of how many prescribed typical overseas homes the average priced Hong Kong home may buy at any given time period. Overtime, perhaps one may observe certain trends among the markets and / or may even compare prices to help in assessing the relative viability of the markets. In the current period, the indexes indicate that an average priced Hong Kong home may be traded for approximately:

Archive 2005

Archive 2006

Archive 2007

2008 (the 1997 equivalent, when Hong Kong was at its peak, is provided in brackets to give a contrast):

A)     1.18 homes in London-UK, a 29% year on year (5.13 homes)

B)     1.06 homes in Greater Vancouver, no % change year on year (4.32 homes)

C)     1.76 homes in Greater Toronto, a 15% increase year on year (5.64 homes)

D)     0.31 home in Manhattan of New York City, a 9% drop year on year (1.75 homes)

E)     3.60 homes in Metropolitan Beijing, a 12% drop year on year (15.74 homes)

F)     3.84 homes in Metropolitan Shanghai, a 15% drop year on year (16.19 homes)

Overall, the amount of homes for which a typical Hong Kong home can be traded has dropped in 3 of the markets listed, namely New York City, Beijing, and Shanghai. On the other hand, a typical Hong Kong can be traded for a bit more homes in Toronto and London compared to 2007. The ratio for Vancouver remains the same.

One reason for this probably has to do with the relative strengthening of the Hong Kong Dollar (being pegged to the US$) over the UK Pound and the Canadian Dollar. Conversely, the increased value (albeit slower since late 2008) of the Chinese Yuan and the increased residential prices (albeit been dropping since late 2008) in Beijing and Shanghai have reduced the purchasing power of a Hong Kong home.   

We have also calculated the residential price indexes based on their respective currencies for each of the markets (1994=1.00) from 1994 to 2008 to see which market would give residential real estate investors the best possible return, based purely on price appreciation, during the period.

The results indicate that Hong Kong is the worst market while New York City offers the best performance followed closely by London.

We have also listed the supportive charts below for reference. There are 2 for each market; one being the price of the prescribed typical overseas home in the overseas and Hong Kong currencies, while the other being the prices of the prescribed typical overseas home and the average priced Hong Kong home expressed in Hong Kong currency:

The following markets or cities have been included to date:

A)     London in the UK = the prescribed typical home is a 3 bedroom townhouse in a suburban or non-CBD location.

B)     Greater Vancouver = the prescribed typical home is a 3-4 bedroom single detached house built of timber frame with a single or double garage set in a typical suburban location.

C)     Greater Toronto = the prescribed typical home is a 4 bedroom single detached house built of timber frame with a single or double garage set in a typical suburban location.

D)     Manhattan of New York City = the prescribed typical home is a 3 bedroom condominium apartment in a low, medium, or high rise building.

E)     Metropolitan Beijing = the prescribed typical home is a 3 bedroom condominium apartment in a medium to high rise building set in a suburban or non-CBD location.

F)     Metropolitan Shanghai = the prescribed typical home is a 3 bedroom condominium apartment in a medium to high rise building set in a suburban or non-CBD location.

Other markets or cities may be added later.

Please note the following when referring to the indexes:

a)     These indexes are meant for quick and rough references only and are derived from rough data and simple calculations. These are not products of complex data and sophisticated formulae.

b)     The data sources are deemed to be reliable and professional yet no comprehensive examination or verification of their accuracy or applicability was done.

c)     Readers, users, and investors referring to the indexes should bear this in mind and no liability or responsibility of any kind is assumed or taken up by Zeppelin and its staff members, mangers, directors, executives, associates, consultants, advisors, professionals, and the like for errors, omissions, and mistakes that may be contained herein. Proper professional assistance and advice should be sought for individual cases, circumstances, or investment opportunities.

d)     The selection of the “prescribed” typical homes in the overseas markets may harbor some degree of subjectivity and each market may differ in the house type being chosen. For instance, while for most North American markets the single detached house is the typical norm, certain cities may have other more prevalent home types ranging from townhouses to high rise condominium apartments.

e)     Generally average home prices in nominal terms are used and thus there is always the possibility that such average prices may have been skewed up or down in any given time period if there are more expensive or more inexpensive homes transacted during the time period in question. Nonetheless, this possibility may be reduced in some ways if the market is sufficiently huge and / or with the data coming from several periods. Also, home prices related to Beijing and Shanghai may have a skew toward 1^st hand (from real estate developers to the first buyers) transactions.

f)       No adjustments have been made for inflation, deflation, and the like except for currency exchange rates.

The following data and information resources have been utilized in deriving the indexes and acknowledgement is hereby given to them:

a)     Hong Kong Centa-City index of Centaline Agency

b)     Land Search online Hong Kong market report

c)     Office of the Deputy Prime Minister in the UK

d)     British Columbia Multiple Listing Statistics

e)     ReMax Crest Realty (Westside) in Vancouver

f)       Toronto Real Estate Board

g)     Randi Emmott of ReMax Excellence Realty (website) in Toronto

h)     Miller Samuel Appraisers and Consultants in New York City

i)        China Index Academy’s China Real Estate Index System market reports

j)       Soufun’s website

Notes: The article and/or content contained herein are for general reference only and are not meant to substitute for proper professional advice and/or due diligence. The author(s) and Zeppelin, including its staff, associates, consultants, executives and the like do not accept any responsibility or liability for losses, damages, claims and the like arising out of the use or reference to the content contained herein.