House prices are sliding in countries around the world, reviving concerns of a double dip.
Forty-one per cent of the countries tracked by the Knight Frank Global House Price Index reported negative growth in the fourth quarter of 2010. That compares to 31 per cent in the second quarter, when many analysts were hailing signs of a recovery in property prices.
“It looks increasingly likely that Asian markets will escape a crash in prices, but in many of the previously hot markets price falls later this year seems a realistic assumption,” said Liam Bailey, head of residential research at Knight Frank.
Hong Kong continues to lead the world’s property markets, showing a 20 per cent increase from the fourth quarter of 2009. But the growth from the third quarter was a relatively modest 3.7 per cent, Knight Frank found.
Dubai prices fell 10.1 per cent in the second half of 2010, the largest drop of the 49 countries tracked by Knight Frank.
Overall global prices rose by 2.8 per cent for the year, with Asia Pacific posting 7.5 per cent growth for the year. The laggard was North America, which saw no change in values in 2010, according to Knight Frank’s data.
The end of stimulus incentives in the United States and Europe slowed enthusiasm for housing purchases, Mr Bailey said.
“Across Europe and the US the lack of bank lending is likely to extend the recent period of price reversals,” Mr Bailey said.