Strong Home Price Prospects: The ideal conditions for rapid home price rises exist in several markets, with the combination of extremely low borrowing costs, readily available credit, steady economic growth and limited housing supply. Fitch Ratings expects this situation to remain in 2017 and this is reflected in the Stable or Stable/Positive outlooks on the housing and mortgage markets for 19 of the 22 countries in this report.Slowdown Overdue in Hottest Markets: The rate of price increases should slow as home purchases become increasingly expensive relative to household income and rents. Unsustainably rapid price rises in some countries (eg New Zealand, Norway, Australia, Canada) are expected to moderate in 2017.

Market Indicators ................................ 2

Home Prices: Some Growth Rates Unsustainable..................................... 3

Mortgage Arrears: Fading Legacy of Financial Crisis ................................... 4

Mortgage Lending: Mixed, US to See Substantial Drop ................................. 5

Home Purchases: Some Markets Clearly Overheated ............................. 6

Regional Disparities: Price Gaps Widen But Cannot Widen Indefinitely ... 7

Housing Supply: Over-construction Not Visible ................................................ 8

Household Debt: Expanding Quickly in APAC.............................................. 9

Regulatory Environment: Many Initiatives, Effectiveness Uncertain ....10

Country Outlooks ...............................11

Macroeconomic Indicators .................33