Pervasive Property Problems

More than half of the countries in Knight Frank’s Global House Price Index posted a drop in prices in the third quarter, according to a recent report. Overall global prices dropped 0.3 percent in the quarter, the first decline in the history of the index, a popular barometer of the industry.

While it’s no surprise markets are suffering, the extent of the global slowdown reflected by the latest numbers is grim news for sellers. A third of the countries in the index are now reporting price declines from a year ago, with even former fast-risers like Hong Kong, Singapore and Canada posting a drop in the quarter.

“It is now clear that no part of the world is likely to escape the credit crunch as property prices start to fall in more and more parts of the globe,” said Nicholas Barnes, Knight Frank’s head of international research, in a statement. “We expect that trend to continue with the vast majority of locations showing zero or negative quarterly growth by the end of the year.

“Russia and a handful of Eastern Europe countries still performed reasonably well in Q3, with annual price growth even increasing slightly in the Czech Republic. However, there are signs that some of the strongest performers of previous quarters are starting to weaken. Prices in Bulgaria, for example, grew by only 3 percent Q3, half the rate seen in the previous quarter,” Barnes said.

“Lithuania, Canada, the U.K. and Norway saw the biggest falls in Q3, with prices falling by around 5 percent in just three months. The U.S. remains at the bottom of the index and a further quarterly fall of 2.8 percent means prices are now almost 21 percent down from their peak.”

Some of the notable countries still posting healthy gains from a year ago include Cyprus (up 9 percent from a year ago), Italy (up 4.2 percent) and Hungary (5.2 percent).

Story from IHT, Raising the Roof

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