The majority of global property markets are recovering from the economic downturn as prices start rising, according to a new report.
Some 68% of countries to publish figures for the third quarter of this year showing price changes are reporting an upward trend, according to the latest Global House Price Index from Knight Frank. But house prices are still lower than they were a year ago in 57% of locations.
On an annual basis Israel continues to be the best performing property market with a 13.7% increase in prices to the end of the third quarter of 2009. The worst is Dubai which has seen prices fall 47% although there was a modest rise of 1.2% in the third quarter.
On a quarterly basis the biggest price increase was in Singapore where property values went up 15.2%. Other locations where growth is accelerating include Australia which has been relatively unscathed by the credit crunch. Many Asian economies are also performing strongly with quarterly growth of 6% in Hong Kong and 2.5% in mainland China.
Losers on an annual basis include Russia, down 9.10%, the US down 9.4%, Thailand down 18.4%, and Bulgaria down 28%.
‘House prices are now rising in a clear majority of locations around the world with almost 70% of the locations in the Knight Frank Global House Price Index reporting growth in the third quarter of 2009. This compares with under 50% during the second three months of the year,’ said Liam Bailey, head of residential research at Knight Frank.
‘There is still, however, a clear polarisation from the top to the bottom of the table. Israel remains the best performer on an annual basis and is the only country to have recorded double digit growth. Prices in Dubai have fallen the most despite posting a small recovery in the third quarter. The recent debt issues with Dubai World and the subsequent loss of confidence by investors means even this nascent rally is already under threat,’ he added.
Those European countries yet to record their first quarter of growth since the credit crunch include Spain, Denmark and Ireland where an oversupply of stock is holding back prices, the report shows. ‘This contrasts with the UK, which, despite being hit extremely hard initially, is staging a strong comeback as a shortage of houses for sale is contributing to rising values with demand outstripping supply,’ explained Bailey.
‘However, it is worth noting that house prices in almost 60% of the countries in the index are still lower than they were a year ago. That is not to say prices are on a guaranteed one-way trajectory. The global recovery from recession is unlikely to be trouble free as the recent problems in Dubai have highlighted but it does seem that any further falls are likely to be corrections rather than the start of another round of drastic reductions,’ he added.