LATVIA AND DUBAI SUFFER BIGGEST DECLINES
August 27, 2009
Despite major slumps over the last year, China, Portugal, Australia, New Zealand, France, Sweden and Hong Kong have shown strong signs of recovery in Q2 2009, according to data compiled by the Global Property Guide.
Basing its rankings on price-changes after inflation, it found that house prices in Shanghai were up 1.96% during the year to end-Q2 2009. “A strong increase in government spending revived both the housing market and the economy, which has seen 7.1% GDP growth during the first half of 2009,” said GPG founder, Matthew Montagu-Pollock. “Chinese property prices are now widely expected to increase further.”
It also highlighted a 2% rise in the Algarve, and a 1.01% increase in Portugal, with new construction orders increasing by 12.3% during Q2 2009. Australia and New Zealand saw house price increases of 3.73% and 3.31% respectively during Q2 2009. Government subsidies helped to boost prices in France by 3.31%, Sweden saw a rise of 3.16% and Hong Kong’s home prices increased by 8.9%.
Mixed signals in US
Confirming the tentative recovery in the US, it cites data from the Case-Shiller house price index indicating a rise of 0.35% during Q2 2009, from a decline 6.46% during the previous quarter. “The FHFA’s purchase-only index was however down by 1.74% during Q2 2009, somewhat worse than the 0.04% drop during Q1 2009, so the signals in the US are mixed,” said Monagu-Pollock. “Over the year ending in the second quarter of 2009, seasonally-adjusted prices fell 5.03%. This was a lesser fall than in the year to end-Q1 (-9.16%) and than in the year to end Q4 2008 (-9.69%)."
Israel topped the rankings, however. “It has continued to sail through the global recession,” added Montagu-Pollock. “The average price of houses rose 8.40% year-on-year to end-Q2 2009; but the quarterly increase in Q2 2009 was down to 1.02%, a drop from 5.52% in Q1 2009.”
Worst performers
Latvia is still suffering, seeing the worst declines overall. Apartment prices in the capital, Riga, saw fell by an inflation adjusted 60.81% and prices overall dropped 26.75% during Q2 2009. GPG puts this down to high interest rates and the overall economy shrinking by 18% y-o-y to Q1 2009.
Dubai prices fell 49.9% during the year to end-Q2 2009, according to GPG’s house price index, but the decline has slowed, it said. “House prices fell 8.92% in Q2 2009, much less than the 42% drop in Q1 2009,” concluded Montagu-Pollock, adding that Bulgaria, Singapore, Iceland, UK, Japan, Denmark and South Africa all experienced double digit year-on-year declines.
Source - OPP