A recent report of the world’s residential real estate markets showed more increases than decreases for the first time since 2008. That being said, there are clear regional winners and losers. The biggest gainers were in Asia, trailed by the Baltic region — yet the verdict is still out on whether this is a sustained recovery. See the following article from Property Wire for more on this.
Over half of global residential real estate markets have seen property prices rise in the first three months of 2010 with the Asia Pacific region leading the way, a new report shows.
Prices increased in 53% of the locations monitored by the Knight Frank Global House Price Index in the year to the end of March 2010 with annual price inflation for all global property markets moving into positive territory for the first time since the end of 2008.
Unsurprisingly the Asia Pacific region saw the strongest growth with average prices increasing by 17.8%. The top performers are China, Hong Kong and Singapore, all recording annual growth in excess of 24%.
Ukraine and the three Baltic States continue to occupy the bottom rankings with annual price falls of more than 30%.
Claim up to $26,000 per W2 Employee
- Billions of dollars in funding available
- Funds are available to U.S. Businesses NOW
- This is not a loan. These tax credits do not need to be repaid
‘Arguably, the most noticeable trend in global house prices is the ease with which the performance of global housing markets can now be grouped by world region. The top four positions in our rankings are all occupied by Asia Pacific locations, whilst Europe dominates the bottom half of the table,’ said Liam Bailey, head of residential research at Knight Frank.
He said that a recovery in the global housing market is undoubtedly under way. In the first quarter of 2009 some 33% of countries recorded positive annual growth but in the first three months of 2010 this figure is closer to 53%. But it is still some way off the figure of 90% recorded in the first quarter of 2006
‘Analysis of the quarterly growth results suggests the markets in some of the worst performing markets such as the Baltic States and Ukraine are starting to experience some respite, with prices falling at a slower rate than previously. Estonia experienced a 40% fall in prices annually but only a 0.5% fall during the first three months of this year,’ said Bailey.
Prices in Hong Kong increased by 30.6% in the year to March 2010 but Knight Frank expects that to cool. ‘We expect results for the coming months will show more muted levels of growth as the Government’s efforts to rein in the overheated market take effect,’ said Bailey.
The report casts doubts on some official figures relating to both Australia and Spain. It says that figures from the Australian Bureau of Statistics showing that prices rose 20% in the year to March 2010, overstate the actual underlying price growth due to its unique methodology and seasonal shifts in market activity. Other figures suggest a more realistic price rise of 12% and Knight Frank is predicting house price growth to slow over the next six to nine months.
Similar doubts are expressed about figures from the Spanish Housing Ministry which show that prices fell by 4.7% in the year to March 2010. ‘Most serious commentators however believe price falls of 10 to 20% over this period provide a more accurate reflection of Spain’s housing market performance given its backdrop of 20% unemployment, a shrinking economy and rising debt,’ explained Bailey.
In Europe the most positive markets are in Scandinavia. Norway, Sweden and Finland have seen double digit annual price growth. This is due to them being less beset by currency weakness and debt crisis than many of their European neighbors and supply shortages have begun to fuel growth, the reports suggests.
‘It remains to be seen whether this is another period of sustained growth or the middle peak in a double dip recession. Certainly, a number of European economies face growing challenges in the form of tightening fiscal policy and austerity measures,’ concluded Bailey.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.
