Knight Frank’s latest report shows that house price values are beginning to stabilise and almost half of the countries surveyed have begun to register increases.
Liam Bailey, head of residential research says: ‘Significantly, quarterly price falls accelerated in only 22% of the locations and did not exceed 10% in any country. This compares with double-digit falls in a number of locations during the first quarter.
Israel is the only country to have recorded double-digit growth in the 12 months to the end of June and Norway has posted stronger quarterly gains. ‘Northern Scandinavia in general seems to be recovering well with prices also increasing during the second quarter in Sweden (+3.6%) and Finland (+3.9%). This is probably because prices didn’t increase to the same extent as other areas during the property boom. There has also been a sharp slowdown in the number of houses under construction. In Sweden, construction started on 45% fewer houses in the first half of 2009 compared with the same period last year.’
Prices in Dubai, whose brand new metro has just opened, are still falling but the decline has slowed sharply. According to Knight Frank, the second-quarter drop was only 7.5% compared with a 41% slide in the previous three months.’
‘Overall, it seems that prices are starting to bottom out around the world. However, the market is still fragile and patchy. Prices in Bulgaria, for example, fell by 9.7% in the second quarter of 2009; only a slight improvement on the country’s first-quarter fall of 12.4%. In Thailand, values fell by 5.6% after an increase of 2.7% in the first quarter underlining that one quarter of recovery is no guarantee prices will continue to increase. It is also worth noting a number of countries, such as Estonia, that recorded large price falls at the beginning of the year have not yet reported their second quarter results so theglobal picture is not fully complete.
‘Further falls are always a possibility while credit flows remain constrained and the global economy struggles to recover from recession, but it does appear that the worst is behind us,’ says Mr Bailey.
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