Both reports suggest that housing and mortgage markets across the globe have begun to stabilise following a two-year worldwide property slump. Standard & Poor’s says in its report that global housing markets have reached the bottom of the trough, with some return of liquidity now evident, as buyers start to re-enter the market.
Although most of the current sales are confined to distressed properties, Standard & Poor’s says these sales will help solidify asset prices, which should bring more confidence, liquidity and activity to housing markets over the coming months.
Meanwhile, Knight Frank’s Global House Price Index for second quarter 2009 show that that almost half of the 32 countries included in its survey recorded price rises in the second quarter 2009.
Liam Bailey, head of residential research at Knight Frank, says there are now clear signs that global house prices have bottomed, with quarterly price falls accelerating in only seven countries in the three months to end-June 2009. However, price falls in all seven countries were less than 10%.
Bailey says even the US, where the sub-prime mortgage crisis started, is starting to see a recovery with prices up 1,3% in the second quarter. That follows falls of 7% in each of the previous two quarters. An imbalance between supply and pent-up demand also helped the UK’s housing market, which saw a price rise of 1,1% in the second quarter.
On an annualised basis, Israel is now the best performing housing market in the world with prices up 12,5% in the year to end-June 2009. Dubai is now the world’s worst performing housing market with prices down 47,3% over the same time although the rate of decline has slowed sharply in the last three months.
Both Standard & Poor’s and Knight Frank warn that housing markets in many countries are likely to still see high levels of mortgage default and foreclosures throughout 2010, as high unemployment will hamper borrowers’ abilities to repay their mortgage loans.
“The global housing recovery is still fragile and patchy, with further price falls always a possibility while credit flows remain constrained and the global economy struggles to recover from the recession,” says Bailey. –– Property24.