Mixed fortunes from around the world
PRICES increased in almost half of the locations in the Knight Frank Global House Price Index in 2009.
But big losses in places like Latvia, where property halved in value, dragged the annual house price average down to a fall of -3.8 per cent.
Asia Pacific saw the strongest growth with increases of 8 per cent and the top performer was Hong Kong with prices rising by nearly 30 per cent.
Three countries saw prices fall by more than 40 per cent Estonia – 40 per cent, Dubai 42 per cent and Latvia 50 per cent. The UK saw a 3.4 per cent rise. Liam Bailey, head of residential research, Knight Frank, says:
“The recovery in global housing markets is still proving somewhat shaky. Although a number of locations saw staggering growth of up to 28 per cent in 2009, prices were still falling in almost half of the countries in our index during the final three months of the year.
“There remains a very clear polarisation between the locations at the top and bottom of our table. Five countries posted double-digit growth last year, but nine actually saw prices fall by over 10 per cent.
“Prices in Hong Kong and Mainland China increased by over 25 per cent, driven upwards by a massive injection of liquidity into the economy by the Chinese government’s fiscal stimulus package. Prices do appear to be levelling off though with final quarter increases of only 2.9 per cent in Hong Kong.
“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 per cent, with particularly strong growth of 5.2 per cent in the final quarter of the year.
“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 up by 21.3 per cent.
“According to the Jewish Chronicle 50 per cent of Israeli houses are being purchased as second homes.
“At the other end of the scale, Ukraine and the Baltic states (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 stabilised 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 per cent in the last quarter.
“Interestingly, a number of
FALL AND RISE: Riga, in Latvia, which has seen big losses, and Hong Kong, which is up nearly 30 per cent.