The recovery in global house prices continues with values increasing in 68% of the countries reporting price changes for Q3 2009. House prices, however, are still lower than 12 months ago in 57% of the locations, according to the Knight Frank Global House Price Index - Q3 2009.
Croatia saw real estate valuations drop around 7.3% over a twelve month period and a 3.1% quarter on quarter fall, according to the research which tracks 42 countries across the world.
Baltic states Latvia and Estonia have seen real estate valuations drop 34 per cent, but still not enough to rival Dubai, where the slump in the local market has reached 47 per cent.
On the flip side, 16 countries across the world saw property values increase, including Israel, where residential real estate went up by 13.7 per cent in July-September and Singapore, where prices soared by 15 per cent in the third quarter.
Liam Bailey, head of residential research, Knight Frank, commented:
“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.
“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 (+13.7%) during the past 12 months. Prices in Dubai have fallen the most (-47%), despite posting a small recovery (1.2%) 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.
“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. 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.
“Other locations where growth is accelerating include Australia, which was 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. Q3 figures are unavailable for India, but prices were already rising in Q2 and that trend looks set to continue.”
“In some locations, particularly Singapore (+15% in Q3), the strength of the recovery is leading to talk of another bubble developing. 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.”
Knight Frank is a global property consultancy firm with headquarters in London. Together with its New York-based global partner Newmark Knight Frank, its has 207 offices in 43 countries.