Recovery has been uneven for global property markets, with double-digit gains in a handful of nations offset by steep declines in Dubai and parts of the Baltic region. Regionally price growth was most robust in the Asia-Pacific, led by Hong Kong and mainland China, yet a stronger close to 2009 could carry into 2010 — even in the hard-hit regions. See the following article from Property Wire for more on this.
Property prices around the world fell by an average of 3.8% in 2009 with Estonia, Dubai and Latvia suffering the worst declines at over 40%, according to a new report.
The Asia Pacific region saw the strongest growth with real estate prices increasing by an average of 8%, the Knight Frank Global House Price Index shows.
Prices increased in almost half of the locations surveyed by the international property consultants with Hong Kong the best performer seeing rises of almost 30%. Estonia saw prices fall 40%, Dubai experienced a decline of 42% and in Latvia values were down 50%.
Overall the recovery is patchy with some locations showing a spectacular turnaround while others were still seeing price falls in the last three months of the year, the report shows.
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Five countries posted double-digit growth last year. Prices in Hong Kong and mainland China increased by over 25%, driven upwards by a massive injection of liquidity into the economy by the Chinese government’s fiscal stimulus package, according to Liam Bailey, head of residential research.
Israel saw the third best performance with price increases of 21.3%. ‘A continuing desire by Israelis to invest in property rather than equities, other less tangible asset classes and low yielding deposit accounts helped push overall price growth during 2009,’ explained Bailey.
The Australian economy has also benefited from China’s rapid recovery from the global recession and the country’s house prices increased by 13.6%, with particularly strong growth of 5.2% in the final quarter of the year, the report also shows.
At the other end of the scale, Ukraine and the Baltic states of Estonia, Latvia and Lithuania, as well as Ireland and Dubai, continue to be hit hard by the fall out from the credit crunch and prices corrected sharply last year. ‘The positive news for these locations is that prices do seem to have stabilized with most reporting minimal falls or even slight growth in the final three months of the year. In Ireland, however, impact of the credit crunch continues to be felt and prices slid a further 8.3% in the last quarter, said Bailey.
Also a number of countries that recorded tentative growth earlier in the year saw prices fall back again slightly in the final quarter as their economic recovery wobbled. In the US for example, prices rose on average by almost 3% overall in the second half of 2009, but actually fell by 0.6% in the last quarter.
‘Generally, however, most locations were seeing only very moderate falls by the end of the year. This suggests that 2010 could mark the beginning of the recovery for those countries where prices were still falling last year,’ explained Bailey.
‘There are, of course, large question marks still hanging over a number economies, particularly in Europe, as the true impact of the credit crunch continues to unravel. We should not take anything for granted, yet,’ he added.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.