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Global Housing Market Stagnates in 2011
The Knight Frank Global House Price Index*, which tracks the performance of the world’s mainstream housing markets, showed zero growth in the three months to September. This was the index’s weakest performance since Q2 2009.
The third quarter saw mounting pressures on the global economy with politicians seemingly helpless to get to grips with the Eurozone debt crisis. This has reawakened fears of a double dip recession, not just in Europe but around the world. Unsurprisingly, this economic uncertainty has been reflected in the performance of the world’s housing markets. The boom conditions experienced between 2004 and 2007 when global housing markets recorded double-digit annual price growth for 16 consecutive quarters are a distant memory. Average annual growth now stands at just 1.5%.
Perhaps not surprisingly, Ireland experienced the largest annual fall in property prices with a drop of 14.3%. Amongst other EU countries, prices in Cyprus have fallen by 6.6% and those in Bulgaria by 6.1%. However, on a quarterly basis, real estate prices in Bulgaria have decreased by only 0.8% which is among the lowest among the other countries included in the index.
The data of BULGARIAN PROPERTIES is similar, as it shows that in 2011 property prices in the country dropped between 5 and 10% year-on-year, which is a much more moderate decrease compared to the previous 2 years. As BULGARIAN PROPERTIES expected, 2011 brought stabilization to property prices and an increase in the number of deals, which would have been more convincing if only there hadn’t been so much insecurity and tension in the second half of the year.
Looking forward on a global scale, according to Knight Frank house prices are likely to show little improvement in the final quarter of 2011 given that much of the unravelling of the Eurozone sovereign debt crisis took place post-September and has yet to be reflected in the index results.
*The Knight Frank Global House Price Index tracks the performance of fifty-one of the world’s mainstream housing markets. The index is compiled on a quarterly basis using official government statistics or central bank data where available.
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