Global property markets see strong growth but modest Dubai price rise could be wiped out by debt
The recovery in global house prices continued in the third quarter of this year with Singapore seeing the biggest rise and Dubai the largest annual drop.
Residential property values increased in 68% of countries reporting price changes, according to the latest Global House Price Index from Knight Frank.
But house prices are still lower than 12 months ago in 57% of the locations with Israel the top year on year performer with a 13.7% price increase from the same time last year.
During the third quarter property prices in Singapore rose 13.7% compared with the previous three months and Dubai posted a modest positive growth (1.2%) but has seen prices drop in the last 12 months by 47%.
‘House prices are now rising in a clear majority of locations around the world with almost 70% of the locations 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.
Dubai have fallen the most despite posting a small recovery and 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.
Spain, Denmark and Ireland have yet to record their first quarter of growth since the credit crunch and analysts point out that 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,’ explained Bailey.
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, the report says.
‘Quarter three figures are unavailable for India but prices were already rising in quarter two and that trend looks set to continue,’ it adds.
Losers on an annual basis include Russia, down 9.10%, the US down 9.4%, Thailand down 18.4%, and Bulgaria down 28%.
Although overall the outlook is positive and in most locations the decline has slowed.
‘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,’ it concludes.