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Global House Price Downturn accelerated in late 2008 According to the Global Property Guide

It was a disastrous year for prices Housing According to the survey by Global Property Guide home last time the public-price-series for 2008. And viewed from a global perspective, the crisis to accelerate.

The global slump in housing markets may be viewed from three different angles, and unfortunately, They reinforce all the bad news.

In 2008, the pace of price decline compared to 2007.
Only 2 countries experienced a positive boost in 2008 (a downward movement slower house price last year, more or less rapid upward movement), while that 28 countries have seen their dynamic housing market in decline over the previous year. The two countries with positive momentum, Germany and Switzerland.

In 2008, housing prices fell in most countries.
In 2008, only 8 of the 32 countries registered price higher housing, after adjusting for inflation, while the decline in housing prices experienced 20 countries.

In contrast, in 2007, The decline was in its infancy, and only 6 countries have seen house prices fall, while 24 countries saw increases in house prices (all figures adjusted inflation).

Many falls in house prices in 2008 were very severe. Countries where house prices fall by more than 10% during 2008 were in Latvia (Riga) (37%), Lithuania (Vilnius) (27%), United States (20%), United Kingdom (18%), Iceland (16%), Ireland (12%) and Ukraine (Kiev) (12%) (all figures adjusted for inflation).

During the last quarter (Q4) of 2008 dynamics of prices is downward acceleration compared to T3, suggesting that the situation deteriorates.

During the last quarter 2008, 9 countries saw home prices fall by 5% or more during the quarter just that. Price Drops over 10% during this quarter occurred in only three countries – Latvia (Riga), he saw the price drops to 15% in Ukraine (Kiev) (13%) and Hong Kong (15%). Other countries with T4-house price falls of 5% or more including United Arab Emirates (8%), Lithuania (7%), Iceland (7%), Singapore (6%), Bulgaria (5%), and the United Kingdom (5%) (all figures of 'Inflation adjusted, with the exception of the United Arab Emirates).

These price declines were much greater than in the previous quarter, Q3. During this past quarter, only two countries have experienced declines in home prices (adjusted for inflation) of 5% or more, and not the home country have experienced a declining prices of more than 10%.

Regional Survey THE WORLD GUIDE TO PROPERTY

Europe has big problems
The Baltic countries of Latvia and Lithuania suffered most from falling prices, both nominal and real. In Riga, Latvia, the average price of standard-type apartments fell 37% in 2008. Prices have fallen in Latvia since the end of 2007, after an increase remarkable 70% in 2006. The most alarming drop was recorded in the 4th quarter, when prices dropped 15%, the largest quarterly decline in terms real, in any country. These price declines were triggered by rising interest rates and credit standards have tightened Latvia imposed in 2007.

Average prices of flats in Vilnius, Lithuania, fell 27% in 2008. Slowdown in house prices began in mid-2007, and crashed in early 2008.

House prices in Britain fell by 18% in 2008. Although mortgage rates have slightly declined to 4.48% in December 2008, the number of loan approvals for house purchases fell 58% in 2008.

There are serious problems in Iceland (house prices fall 16% in 2008), Ireland (12%), Ukraine (12%), Malta (9%), Portugal (8%), France (8%), Finland (7%), Norway (6%) and Spain (6%).

North American Issues
In the U.S., the center of the financial crisis World in 2008, home prices fell 20%, according to the Case-Shiller of home prices, which focuses on urban areas. OFHEO and FHFB figures, which are associated Fannie Mae and Freddie Mac, and loans have gone a little credibility, suggest a slight decrease of 6% and 3% respectively in 2008. The Government American recently approved a package of 787 billion U.S. economic stimulus package, including 275 billion dollars will go to help the housing market crisis.

Canada was much less affected than the United States.

Pacific upside down
Australia and New Zealand house price declines in 2008 of 7% and 8% respectively.

Asia is more isolated
Markets Housing in Asia have not been isolated. Singapore, Hong Kong and the Philippines have recorded falls in house prices in 2008.

Prices closed Residential Singapore fell 9% during 2008, in sharp contrast with 26% increase in prices in 2007. Economic problems developed countries hurt the exports of Singapore, and while in 2008, production in manufacturing, particularly electronics, mechanics Precision and chemicals, fell by 10.7%. Singapore is officially in recession in Q3 2008.

Hong Kong was severely affected by the crisis. House prices fell on average by 6% in 2008. But during the last quarter, Hong Kong has seen a sharp price decline of 14%.

In Makati, Philippines, first prize in the 3-bedroom condo fell 2% in 2008, after a price rise 11% in 2007. However, construction of tower blocks Housing continues with residential condominium units rose 7% over 2008, according to Colliers Philippines.

Japan recorded the Tokyo condominium price rises modest 1.2% in 2008. By In addition, land prices in six major cities in Japan decreased by 6% this year in September 2008.

In Shanghai, China, housing prices reduced to 5% until the end of 2008, after peaking at 30% This year in May 2008. However, Shanghai is likely to be something exceptional, Xinhua news agency has reported falling house prices in 70 cities in 2008. Shenzhen has suffered the worst fall, with prices down 18% in 2008

United Arab Emirates on bases fragile
In Dubai, United Arab Emirates, despite the gloomy world situation has been surprisingly strong rise in house prices of 41% compared to 2008. However, during the fourth quarter, prices fell 8% in nominal terms. This decrease is attributable to the adjustment brutal lending criteria, higher interest rates, multiple redundancies, and alarm among buyers.

Forecast: No Growth in 2009
History suggests that in an accident, housing markets will take many years since the peak of full recovery. Given this and the IMF pessimistic forecasts for the global economy is unlikely an actual recovery on the global real estate market this year.

The IMF projected that world economy will grow 0.5% in 2009, the lowest level in 60. GDP in advanced economies are expected to decline by 2% in 2009. The United Kingdom and Japan will be hardest hit. Production in the UK market in May by 2.8% while Japan in May fell 2.6%.

Growth in emerging economies forecast to slow to 3.3% in 2009 against 6.3% in 2008. Developing Asia should be the least affected, with growth of 5.5%. China's economy should grow by 6.7% in 2009, but a substantial decrease growth 9% compared to 2008.

We can be optimistic for five reasons:
• Valuation still significantly expanded in most countries, in terms of price / rent.
• Economic growth is slow or negative in many countries, which is negative for housing values.
• It there are indications that banks are increasingly willing to lend.
• The unprecedented nature of financial system failure contributed significantly the difficulties encountered by the housing markets in the world.
• Some national governments have difficulty to refinance the national debt, save their currencies under pressure. Currency volatility is likely to exacerbate the problems of housing sector in countries where many loans were made in a foreign currency.

The positive news is that the U.S. government and several other people act with energy, like the IMF. However, it is a difficult road to go.

# # #
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Telephone: (+632) 750 0560
Email: prince@globalpropertyguide.com

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About the Author

The Global Property Guide (http://www.globalpropertyguide.com) is a research publication and web site for the high net worth investor in residential property – providing information about the process and benefits of buying property in any country in the entire world.

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