Will 2011 be the turning point?
WILD RIDE After almost 15 years of rising property prices in the vast majority of global property markets — and by as much as 300% in some markets — the last half of the decade was a rollercoaster ride for the global property industry. The sub-prime crisis emerged in the US in 2006, and rocked the global financial system. Property prices declined by an average of around 17% across the globe over the next two years.
However, global house prices showed signs of recovery in 2009, growing by around 10% on average. The latest survey of the Global Property Guide reveals that 17 out of 35 countries recorded increases in house prices over the year to end Q3 last year, based on inflation-adjusted house price changes. Of the 18 countries that experienced house price falls, 11 recorded slower rates of decline. “This recovery brought global house prices to levels around 9% below the peaks recorded before the downturn,” says Peter Gilmour, chairman of RE/MAX of Southern Africa. “Of course, there are wide differences in the performances of local property markets. In addition, property prices have, in the last few months, showed signs of decline again. This can, to some extent, be ascribed to the fact that the stimulus provided by aggressive rate cutting has been absorbed by markets. The ongoing difficulty of accessing finance also continues to constrain substantial recovery.”