Top 7 Property Markets

Real estate markets worldwide are stabilizing and showing signs of tentative recovery, according to a recent report from London-based global property consultancy Knight Frank. Unlike during the first quarter of this year, when many countries continued to suffer double-digit declines in average home prices, the second quarter saw upticks in half of the countries tracked by Knight Frank, compared with the previous three months. (Year-over-year prices are still down across the board.) Among the remaining countries, none saw a decline of greater than 10%.

The strongest region was the Nordic countries, where prices rose 5.3% in Norway, 3.9% in Finland, and 3.6% in Sweden. The U.S. also saw a rebound, with a 1.7% quarterly increase in average prices. The worst-hit places? Dubai and Bulgaria, where residential property prices fell 7.5% and 9.7%, respectively.

Which countries around the world saw the greatest price increases? Check the list…

1. Norway

Quarterly Price Change: 5.3% (Change in average price, second quarter 2009 vs. first quarter 2009)

Annual Rank: 11

Annual Price Change: -1.5% (change in average price, second quarter 2009 vs. second quarter 2008)

There has been a sharp slowdown in the number of houses under construction in Norway, with new starts falling to their lowest levels since 2000. Given the country’s tight housing supply, prices have been pushed up. Norway posted a strong quarterly gain in the second quarter of 2009, up 5.3% from the second quarter of 2008, marking the country’s second successive quarterly increase after a 4.1% hike in the first three months of the year. Real estate taxes have also remained relatively low in this oil-rich country.

2. Australia

Quarterly Price Change: 4.2%

Annual Rank: 10

Annual Price Change: -1.4%

Home prices have bounced back in Australia since the start of this year thanks to a commodities boom that has fueled strong demand for exports to Asia. But price growth in Sydney’s residential market remains relatively lackluster, compared with other state capitals. Over the past year, the country’s financial capital has witnessed softening demand in its commercial real estate sector and increased numbers of tenants subleasing space.

3. Israel

Quarterly Price Change: 4.0%

Annual Rank: 1

Annual Price Change: 12.5%

Israel remains the best performer worldwide on an annual basis and is the only country to have recorded double-digit growth over the past year despite the onset of the financial crisis. Housing prices were driven up thanks to a steady stream of foreign investment by wealthy individuals, particularly Americans, who have strong ties to the country and remain keen to invest there.

4. Finland

Quarterly Price Change: 3.9%

Annual Rank: 15

Annual Price Change: -2.9%

Finland is among the other Nordic countries holding up relatively well despite the economic recession, as prices didn’t increase to the same extent as other areas during the property boom. Housing prices in Finland increased in the second quarter of 2009, up 3.9% from the first quarter.

5. Sweden

Quarterly Price Change: 3.6%

Annual Rank: 13

Annual Price Change: -2.0%

There has been a sharp slowdown in the number of houses under construction, keeping housing supply down and prices up. In Sweden, construction started on 45% fewer houses in the first half of 2009 compared to the same period in 2008. The country’s real estate market has been recovering well, as prices didn’t skyrocket out of proportion compared to other European countries during the property boom.

6. Netherlands

Quarterly Price Change: 2.7%

Annual Rank: 24

Annual Price Change: -10.3%

Though the overall office vacancy rate remains high in the Amsterdam market, availability is limited in prime central markets. Vacancy rates in sought-after areas like central Amsterdam and South Axis were below 5% at the end of 2008. The country’s small supply pipeline will likely keep vacancy rates in check and prices firmer.

7. Switzerland

Quarterly Price Change: 2.1%

Annual Rank: 2

Annual Price Change: 6.1%

Switzerland was less harmed by the economic recession than many of its European neighbors. With demand from domestic and international buyers outstripping the country’s relatively constrained housing supply, real estate prices mounted.

Source: Bloomberg Businessweek

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5 comments

  1. Great work Victor. Amazing information in just 7 steps. Wonderful idea. Continue like this.

    Best wishes and Merry Christmas,
    Leo G

    • Victor

      Thanks a lot for your feedback.

      All the best for 2011!

      Victor

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