Global house prices
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Patchy progress in Europe
Surprisingly, Latvia performed best among all European countries in the year to end-Q2 2010. Prices of standard-type apartments rose by an enormous 9.38% over the year to end-Q2 2010, based on prices published by Arco Real Estate.
Latvia had suffered the worst house price crash during the global economic crisis. Prices fell by 33.83% in 2008, and further plunged 52.81% in 2009. But in October 2009, house prices stopped falling and have since rallied, though that rally appears now to be petering out.
Finland, Norway and the United Kingdom posted strong increases in Q2 2010. House prices in Finland were up 8.89% over the year to end-Q2 2010. In Greater Helsinki, prices rose 12.6% over the same period. Finland began to recover from the crisis as early as Q3 2009, and has experienced strong house price rises since then.
In Norway, house prices were up 6.60% over the year to end-Q2 2010. After falling by an average of 6% in 2008, Norway's house prices started picking up in Q3 2009, thanks to all-time low interest rates.
Based on data from Nationwide, house prices in the United Kingdom were up 5.87% during the year to end-Q2 2010. This was the 3rd consecutive quarterly increase. Construction of new private houses was 17.7% higher in Q2 2010 compared to the same quarter last year. The UK's economy expanded by 1.1% in Q2 2010, its highest growth since the rebound in Q4 2009.
Many European countries that have not yet recovered from the crisis nevertheless experienced slower house price falls. These markets include Denmark, Netherlands, France, Slovakia, Spain, Poland, Russia, Iceland, Bulgaria and Lithuania.
The house price downturn continues in Portugal, Croatia and Ireland. Ireland had the steepest house price drop among all countries in our table. In Q2 2010, Irish house prices were down 15.85% from a year earlier, and down 36.16% from its peak. Recovery is not expected this year, and according to the OECD, house prices in Ireland would have to fall by a total of 57% for the Irish be able to afford buying houses again.
Latin America and the Caribbean
The key Latin American housing markets have seen 3 years of strong price growth, and these price rises are widely said to continue. However, no official statistics are available, except in Colombia, where they are late.
Economic growth in Caribbean countries may fuel their housing markets. LAC GDP is expected to increase by 4% in 2010. No house price statistics are available for the Caribbean.
The Middle East slows
Over the year to end-Q2 2010, house prices in Israel were up 9.06%. However, house prices declined by 2.15% during the last quarter, possibly as a result of government measures.
In Dubai, UAE, house prices rose by 5.66% over the year to end-Q2 2010. But the emirate's recovery may be short-lived, as house prices fell by 4.17% during the last quarter.
(Provided by Global Property Guide, an online property research house.)
