Global House Price Downturn Accelerated At End Of 2008 According To The Global Property Guide

<h1>Global House Price Downturn Accelerated At End Of 2008 According To The Global Property Guide </h1>Author: <a title="The Global Property Guide" href="http://www.articlesbase.com/authors/the-global-property-guide/12421.htm">The Global Property Guide</a> It has been a dismal year for house prices, according to the Global Property Guide’s latest survey of publicly-available house-price time-series for the year 2008. And seen from a global perspective, the downturn is still accelerating. The collapse of the world’s housing markets can be seen from three points of view, and unfortunately, all of them reinforce the bad news. During 2008, the downward price momentum accelerated, as compared to 2007. Only 2 countries saw positive momentum in 2008 (a slower downward house price movement than last year, or faster upward movement), while 28 countries saw their housing market momentum deteriorating, compared to the previous year. The two countries with a positive momentum were Germany and Switzerland. During 2008, house prices fell in most countries. During 2008 only 8 out of 32 countries saw house prices rise, after adjustment for inflation, while 20 countries experienced house price falls. In contrast, during the year 2007, the downturn was just beginning, and only 6 countries saw house prices fall, while 24 countries saw house prices rise (all figures inflation-adjusted). Many house-price falls during 2008 were extremely severe. Countries with house price falls of over 10% during 2008 were Latvia (Riga) (37%), Lithuania (Vilnius) (27%), the US (20%), the UK (18%), Iceland (16%), Ireland (12%), and the Ukraine (Kiev) (12%) (all figures inflation-adjusted). During the final quarter (Q4) of 2008, the downward price momentum significantly accelerated, as compared to Q3, suggesting that the situation is deteriorating. During 2008’s final quarter, 9 countries saw house price falls of 5% or more during just that quarter. Price drops of more than 10% during this single quarter occurred in three countries - in Latvia (Riga), which saw price falls of 15%, in Ukraine (Kiev) (13%), and in Hong Kong (15%). Other countries with Q4 house-price falls of 5% and over, included the UAE (8%), Lithuania (7%), Iceland (7%), Singapore (6%), Bulgaria (5%), and the UK (5%) (all figures inflation-adjusted, except UAE). These price falls were much greater than during the previous quarter, Q3. During that previous quarter, only two countries experienced house-price falls (inflation-adjusted) of 5% or more, and no countries experienced house-price falls of more than 10%. REGIONAL SURVEY BY <a href="http://www.globalpropertyguide.com">GLOBAL PROPERTY GUIDE</a> Europe has major problems The Baltic countries of Latvia and Lithuania suffered the hardest price falls both in nominal and real terms. In Riga, Latvia, the average price of standard-type apartments plunged 37% during 2008. Prices have been going down in Latvia since late 2007, after a remarkable increase of about 70% in 2006. The most alarming decline took place in the 4th quarter, when prices declined by 15%, the steepest quarterly drop in real terms in any country. These price falls were triggered by increased interest rates, and by the tightened credit rules which Latvia imposed in 2007. Average prices of apartments in Vilnius, Lithuania, fell by 27% during 2008. House prices started slowing in mid-2007, and crashed in early 2008. House prices in the UK plummeted by 18% in 2008. Although mortgage interest rates dropped slightly, to 4.48% in December 2008, the number of loan approvals for house purchases fell 58% in 2008. There is serious trouble in Iceland (house price fall of 16% during 2008), Ireland (12%), Ukraine (12%), Malta (9%), Portugal (8%), France (8%) Finland (7%), Norway (6%) and in Spain (6%). North America’s woes In the US, the centre of the global financial crisis, in 2008 house prices fell 20% according to the Case-Shiller house price index, which emphasizes urban areas. OFHEO and FHFB figures, which are associated with Fannie Mae and Freddie Mac loans and have somewhat lost credibility, suggest a smaller decline of 6% and 3% respectively, during 2008. The US government recently approved a $ 787 billion economic stimulus package, of which $275 billion will be allocated to rescue the ailing housing market. Canada has been much less affected than the US. Pacific heads down Both Australia and New Zealand saw house price declines during 2008, of 7% and 8% respectively. Asia no longer insulated Housing markets in Asia have not been insulated. Singapore, Hong Kong and Philippines recorded house price falls during 2008. Singapore’s private residential prices dropped 9% during 2008, in sharp contrast to the 26% price increase of experienced during 2007. The developed countries’ economic troubles adversely affected Singapore’s exports, and during 2008, output in the manufacturing sector, particularly of electronics, precision engineering and chemicals, shrank by 10.7%. Singapore was officially in recession in Q3 2008. Hong Kong has been badly hit by the crisis. House prices were down by an average of 6% in 2008. But during the last quarter, Hong Kong experienced a severe decline in prices of 14%. In Makati, Philippines, prime 3-bedroom condominium prices fell by 2% during 2008, after an 11% price rise during 2007. Nevertheless construction of high-rise residential buildings continues, with residential condominium stock rising by 7% during 2008, according to Colliers Philippines. Japan recorded modest Tokyo condominium price rises of 1.2% during 2008. On the other hand, land prices in Japan’s six major cities fell by 6% y-o-y to Sep-2008. In Shanghai, China, house price rises slowed to 5% y-o-y by the end of 2008, after peaking at 30% y-o-y to May 2008. However Shanghai is likely to be somewhat exceptional, and Xinhua News Agency reported house prices declines in 70 major cities during 2008. Shenzhen suffered the hardest fall, with prices down by 18% during 2008 UAE on shaky ground In Dubai, UAE, despite the bleak global picture, saw surprisingly large dwelling price rises of 41% during 2008. However during the year’s final quarter, prices fell by 8% in nominal terms. This downturn is attributable to strongly tightening lending criteria, an increase in interest rates, multiple layoffs, and alarm among buyers. Forecast: No recovery in 2009 History suggests that in a crash, housing markets take many years from peak year to full recovery. In view of this and of the pessimistic IMF forecast for the global economy, no real recovery is likely in the global housing markets this year. The IMF has predicted that the world economy will grow by 0.5% in 2009, the lowest level in 60 years. GDP in advanced economies is expected to decline by 2% during 2009. The United Kingdom and Japan will be hit the hardest. Output in the UK may contract by 2.8%, while Japan’s may fall by 2.6%. Growth in emerging economies is expected to slow to 3.3% in 2009, down from 6.3% in 2008. Developing Asia is forecast to be the least affected, with growth of 5.5%. China’s economy is predicted grow by 6.7% in 2009, but this is a substantial decline from 9% growth during 2008. We cannot be optimistic for five reasons: • Valuations still clearly remain stretched in most countries, in terms of price/rent ratios. • Economic growth is slowing or negative in many countries, which is negative for housing values. • There are no signs that banks are becoming more willing to lend. • The unprecedented nature of the financial system’s collapse has greatly added to the difficulties facing the world’s housing markets. • Some national governments are experiencing difficulty in refinancing their national debt, putting their currencies under pressure. Currency instability is likely to aggravate housing sector problems in countries where many loans were taken out in a foreign currency. The positive news is that the US government and several others are acting with vigour, as has the IMF. Nevertheless, there is a long tough road ahead. ### Description of the Global Property Guide: The Global Property Guide (<a target="_blank" href="http://www.globalpropertyguide.com)">http://www.globalpropertyguide.com)</a> is an on-line property research house, specializing in analyzing residential property valuations around the world. Terms of Use: On-line newspapers, magazines, sites, etc wishing to use material from this press release MUST provide a clickable link to <a href="http://www.globalpropertyguide.com"><a href="http://www.globalpropertyguide.com" target="_blank">www.globalpropertyguide.com</a></a> Sites and newspapers found not to be providing a link to us will be removed from our press list. Requests for Comments: Requests for comments are best made by telephone to +(63) 917 321 7073. UK-based callers should telephone before lunchtime. Our local time is Hong Kong time, i.e., standard time + 8.00 Economics Team: Prince Christian Cruz, Senior Economist Phone: (+632) 750 0560 Email: <a href="mailto:prince@globalpropertyguide.com">prince@globalpropertyguide.com</a> Publisher and Strategist: Matthew Montagu-Pollock Phone: (+632) 867 4220 Cell: (+63) 917 321 7073 Email: <a href="mailto:editor@globalpropertyguide.com">editor@globalpropertyguide.com</a> Address: Global Property Guide <a href="http://www.globalpropertyguide.com"><a target="_blank" href="http://www.globalpropertyguide.com">http://www.globalpropertyguide.com</a> </a>5F Electra House Building 115-117 Esteban Street Legaspi Village, Makati City Philippines 1229 info@globalpropertyguide.comAbout the Author: The Global Property Guide (<a target="_blank" href="http://www.globalpropertyguide.com)">http://www.globalpropertyguide.com)</a> 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.Article Source: <a href="http://www.articlesbase.com/">ArticlesBase.com</a> - <a href="http://www.articlesbase.com/business-articles/global-house-price-downturn-accelerated-at-end-of-2008-according-to-the-global-property-guide--810034.html" title="Global House Price Downturn Accelerated At End Of 2008 According To The Global Property Guide ">Global House Price Downturn Accelerated At End Of 2008 According To The Global Property Guide </a>

It has been a dismal year for house prices, according to the Global Property Guide’s latest survey of publicly-available house-price time-series for the year 2008. And seen from a global perspective, the downturn is still accelerating.

The collapse of the world’s housing markets can be seen from three points of view, and unfortunately, all of them reinforce the bad news.

During 2008, the downward price momentum accelerated, as compared to 2007.
Only 2 countries saw positive momentum in 2008 (a slower downward house price movement than last year, or faster upward movement), while 28 countries saw their housing market momentum deteriorating, compared to the previous year. The two countries with a positive momentum were Germany and Switzerland.

During 2008, house prices fell in most countries.
During 2008 only 8 out of 32 countries saw house prices rise, after adjustment for inflation, while 20 countries experienced house price falls.

In contrast, during the year 2007, the downturn was just beginning, and only 6 countries saw house prices fall, while 24 countries saw house prices rise (all figures inflation-adjusted).

Many house-price falls during 2008 were extremely severe. Countries with house price falls of over 10% during 2008 were Latvia (Riga) (37%), Lithuania (Vilnius) (27%), the US (20%), the UK (18%), Iceland (16%), Ireland (12%), and the Ukraine (Kiev) (12%) (all figures inflation-adjusted).

During the final quarter (Q4) of 2008, the downward price momentum significantly accelerated, as compared to Q3, suggesting that the situation is deteriorating.

During 2008’s final quarter, 9 countries saw house price falls of 5% or more during just that quarter. Price drops of more than 10% during this single quarter occurred in three countries - in Latvia (Riga), which saw price falls of 15%, in Ukraine (Kiev) (13%), and in Hong Kong (15%). Other countries with Q4 house-price falls of 5% and over, included the UAE (8%), Lithuania (7%), Iceland (7%), Singapore (6%), Bulgaria (5%), and the UK (5%) (all figures inflation-adjusted, except UAE).

These price falls were much greater than during the previous quarter, Q3. During that previous quarter, only two countries experienced house-price falls (inflation-adjusted) of 5% or more, and no countries experienced house-price falls of more than 10%.

REGIONAL SURVEY BY GLOBAL PROPERTY GUIDE

Europe has major problems
The Baltic countries of Latvia and Lithuania suffered the hardest price falls both in nominal and real terms. In Riga, Latvia, the average price of standard-type apartments plunged 37% during 2008. Prices have been going down in Latvia since late 2007, after a remarkable increase of about 70% in 2006. The most alarming decline took place in the 4th quarter, when prices declined by 15%, the steepest quarterly drop in real terms in any country. These price falls were triggered by increased interest rates, and by the tightened credit rules which Latvia imposed in 2007.

Average prices of apartments in Vilnius, Lithuania, fell by 27% during 2008. House prices started slowing in mid-2007, and crashed in early 2008.

House prices in the UK plummeted by 18% in 2008. Although mortgage interest rates dropped slightly, to 4.48% in December 2008, the number of loan approvals for house purchases fell 58% in 2008.

There is serious trouble in Iceland (house price fall of 16% during 2008), Ireland (12%), Ukraine (12%), Malta (9%), Portugal (8%), France (8%) Finland (7%), Norway (6%) and in Spain (6%).

North America’s woes
In the US, the centre of the global financial crisis, in 2008 house prices fell 20% according to the Case-Shiller house price index, which emphasizes urban areas. OFHEO and FHFB figures, which are associated with Fannie Mae and Freddie Mac loans and have somewhat lost credibility, suggest a smaller decline of 6% and 3% respectively, during 2008. The US government recently approved a $ 787 billion economic stimulus package, of which $275 billion will be allocated to rescue the ailing housing market.

Canada has been much less affected than the US.

Pacific heads down
Both Australia and New Zealand saw house price declines during 2008, of 7% and 8% respectively.

Asia no longer insulated
Housing markets in Asia have not been insulated. Singapore, Hong Kong and Philippines recorded house price falls during 2008.

Singapore’s private residential prices dropped 9% during 2008, in sharp contrast to the 26% price increase of experienced during 2007. The developed countries’ economic troubles adversely affected Singapore’s exports, and during 2008, output in the manufacturing sector, particularly of electronics, precision engineering and chemicals, shrank by 10.7%. Singapore was officially in recession in Q3 2008.

Hong Kong has been badly hit by the crisis. House prices were down by an average of 6% in 2008. But during the last quarter, Hong Kong experienced a severe decline in prices of 14%.

In Makati, Philippines, prime 3-bedroom condominium prices fell by 2% during 2008, after an 11% price rise during 2007. Nevertheless construction of high-rise residential buildings continues, with residential condominium stock rising by 7% during 2008, according to Colliers Philippines.

Japan recorded modest Tokyo condominium price rises of 1.2% during 2008. On the other hand, land prices in Japan’s six major cities fell by 6% y-o-y to Sep-2008.

In Shanghai, China, house price rises slowed to 5% y-o-y by the end of 2008, after peaking at 30% y-o-y to May 2008. However Shanghai is likely to be somewhat exceptional, and Xinhua News Agency reported house prices declines in 70 major cities during 2008. Shenzhen suffered the hardest fall, with prices down by 18% during 2008

UAE on shaky ground
In Dubai, UAE, despite the bleak global picture, saw surprisingly large dwelling price rises of 41% during 2008. However during the year’s final quarter, prices fell by 8% in nominal terms. This downturn is attributable to strongly tightening lending criteria, an increase in interest rates, multiple layoffs, and alarm among buyers.

Forecast: No recovery in 2009
History suggests that in a crash, housing markets take many years from peak year to full recovery. In view of this and of the pessimistic IMF forecast for the global economy, no real recovery is likely in the global housing markets this year.

The IMF has predicted that the world economy will grow by 0.5% in 2009, the lowest level in 60 years. GDP in advanced economies is expected to decline by 2% during 2009. The United Kingdom and Japan will be hit the hardest. Output in the UK may contract by 2.8%, while Japan’s may fall by 2.6%.

Growth in emerging economies is expected to slow to 3.3% in 2009, down from 6.3% in 2008. Developing Asia is forecast to be the least affected, with growth of 5.5%. China’s economy is predicted grow by 6.7% in 2009, but this is a substantial decline from 9% growth during 2008.

We cannot be optimistic for five reasons:
• Valuations still clearly remain stretched in most countries, in terms of price/rent ratios.
• Economic growth is slowing or negative in many countries, which is negative for housing values.
• There are no signs that banks are becoming more willing to lend.
• The unprecedented nature of the financial system’s collapse has greatly added to the difficulties facing the world’s housing markets.
• Some national governments are experiencing difficulty in refinancing their national debt, putting their currencies under pressure. Currency instability is likely to aggravate housing sector problems in countries where many loans were taken out in a foreign currency.

The positive news is that the US government and several others are acting with vigour, as has the IMF. Nevertheless, there is a long tough road ahead.

###
Description of the Global Property Guide:
The Global Property Guide (http://www.globalpropertyguide.com) is an on-line property research house, specializing in analyzing residential property valuations around the world.

Terms of Use:
On-line newspapers, magazines, sites, etc wishing to use material from this press release MUST provide a clickable link to www.globalpropertyguide.com Sites and newspapers found not to be providing a link to us will be removed from our press list.

Requests for Comments:
Requests for comments are best made by telephone to +(63) 917 321 7073. UK-based callers should telephone before lunchtime. Our local time is Hong Kong time, i.e., standard time + 8.00

Economics Team:
Prince Christian Cruz, Senior Economist
Phone: (+632) 750 0560
Email: prince@globalpropertyguide.com

Publisher and Strategist:
Matthew Montagu-Pollock
Phone: (+632) 867 4220
Cell: (+63) 917 321 7073
Email: editor@globalpropertyguide.com

Address:
Global Property Guide
http://www.globalpropertyguide.com
5F Electra House Building
115-117 Esteban Street
Legaspi Village, Makati City
Philippines 1229
info@globalpropertyguide.com

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.

Rate this Article:

5 / 5 stars - 1 vote(s)

Re-Publish

Article Source: http://www.articlesbase.com/business-articles/global-house-price-downturn-accelerated-at-end-of-2008-according-to-the-global-property-guide--810034.html

Article Tags: global, property, guide, real, estate, land, investment, house, price, prices, downturn, europe, america, asia, pacific, middle, east, caribbean

Related Videos
Related Articles
Ask / Related Q&A

Play

Learn about The housing price conundrum

Play

Learn about the Housing Conundrum - part 4

Play

Learn about the Housing Price Conundrum - part 3

Play

Learn about the Housing price conundrum - part 2

Play

Pricing a Home (Selling your Parents Home)

Latest Business Articles
More from The Global Property Guide

Starting a Solar Power Business in Nepal

By: Davinos Greeno | 27/12/2009
Ok lets start with where Nepal is. Nepal is located between the two Asian giants of China and India and Nepal is often described as a yam between two giant boulders. Kathmandu is the capital and is a haven for trekkers and tourists from all over the world especially as the...

Iphone N2 China TV Iphone Clone Dual SIM Dual Standby Quad Band WIFI JAVA

By: agoodic | 27/12/2009
Iphone N2 China TV Iphone Clone Dual SIM Dual Standby Quad Band WIFI JAVA Free ShippingIphone III China wholesaleCelular Iphone N2,Celular N2,Celulares chinos

Invest in your interpersonal skills

By: Vincent Stevenson | 27/12/2009
This article sends out a simple message about succeeding in interviews. Your interpersonal skills must be well-honed and your interviewing technique must be razor sharp. Talent and great qualifications are not enough to land the job. You must demonstrate in a short interview process how you can add value to your prospective company's bottom line. Read on for more...

Young Models Can Easily Earn Money in Modeling

By: Vikram kuamr | 27/12/2009
Young models can easily find themselves work by signing on with online modeling agencies.

Child Models and Teen Models: How to Gain a Successful Foothold

By: Vikram kuamr | 27/12/2009
If child models or teen models are trying to get started in a modeling career, there are some things that they should know first.

Dealing with Procrastination Overcoming

By: Williams Harding | 27/12/2009
Who and what you are at this moment in time is nothing except the results of your consistent actions, procrastination overcoming is incurable, but requires of you to actually develop yourself and grow in your capacity to do something. The same is true for what you'll become as a person. Being mixed up in the ruinous habit of procrastinating will only act to immobilize you and deprive you of a future that might finish up being only a dream.

Document Management: clarifying chaos and reducing clutter

By: Greg Prather | 27/12/2009
Any time a type of cataloging process is utilized, it is referred to as document management. Any time a type of cataloging process is utilized, it is referred to as document management.

Christian SEO Services - Ethical SEO For Small Businesses

By: delilar jpaulus | 27/12/2009
Every second of the day, consumers are searching for businesses and non-profit organizations to meet their product, or service needs. Google.com alone receives almost 6 billion searches each month.

Recovery on track for the world’s housing markets

By: The Global Property Guide | 11/09/2009 | Business
The world’s housing markets are showing signs of recovery, according to the latest survey of world-wide house price indices prepared by the Global Property Guide (www.globalpropertyguide.com).

House Price Falls in Q1 2009, The Worst Ever

By: The Global Property Guide | 15/06/2009 | Business
Among the 32 countries in the Global Property Guide’s survey of house prices, 27 recorded price falls during the year to the end of the first quarter of 2009, in real terms.

China’s residential property market is unlikely to recover soon

By: The Global Property Guide | 03/04/2009 | Business
Chinese residential property prices aren’t likely to recover soon. That’s the conclusion of recent research by the Global Property Guide (www.globalpropertyguide.com)

Global House Price Downturn Accelerated At End Of 2008 According To The Global Property Guide

By: The Global Property Guide | 10/03/2009 | Business
It has been a dismal year for house prices, according to the Global Property Guide’s latest survey of publicly-available house-price time-series for the year 2008. And seen from a global perspective, the downturn is still accelerating.

High Yields On Residential Property In Chile, Says Global Property Guide

By: The Global Property Guide | 09/03/2009 | Business
There are surprisingly large differences between returns on residential property in Chile’s main cities. Santiago and Concepción are attractive for residential property investors, Viña Del Mar less so, says the Global Property Guide. [www.globalpropertyguide.com]

Most Expensive Real Estate Markets In 2009

By: The Global Property Guide | 05/03/2009 | International Business
Monte Carlo is No 1 in the Global Property Guide’s list of World’s Most Expensive Residential Real Estate Markets 2009, more than twice as expensive, at US$45,000 per square metre, as the runner up. [www.globalpropertyguide.com]

The End of the Global House Price Boom

By: The Global Property Guide | 07/07/2008 | International Business
Weighed down by the credit crunch and high inflation, the global house price boom has ended, according to the latest Global Property Guide survey of house price indicators.

Gloomy Days Ahead for Asia’s Housing Markets

By: The Global Property Guide | 08/05/2008 | Business
Asian property markets, though still relatively unaffected by the credit crunch, will soon be affected by inflation and higher interest rates, warns the Global Property Guide, because of rising food, fuel and other commodity prices.