World's house values fall for the first time

Published 24th Nov 2008

• Britain among worst performers with 10% drop
• Dubai, Slovakia and Russia see big increases

Global house prices fell for the first time on record over the past three months, underlining the extent of the downturn.

Britain, which recorded falls of 4.6% during the quarter, was among the worst performers along with Latvia (6.2% down), Norway (4.5%) and Canada (4.9%), according to the property consultancy Knight Frank. The firm's global house price index said average prices across the world fell by 0.3% compared with the second quarter.

"It is now clear that no part of the world is likely to escape the credit crunch as property prices start to fall in more and more parts of the globe," said Nicholas Barnes, head of international research at Knight Frank.

"We expect that trend to continue with the majority of locations showing zero or negative growth by the end of the year."

On an annualised basis, global house prices continued to grow, though the rate of 3.8% compared with the third quarter last year, has slowed. Over the past year, prices in Britain have suffered the fourth largest percentage decline in the table of 44 nations compiled from official national statistics. Compared with the third quarter in 2007, house prices in Britain have fallen by 10.6%. In Estonia prices have dropped by 16%, in the US prices are down 16.3% and Latvia declined by 24.1%.

Several countries, chiefly in eastern Europe, have seen strong growth over the past year, led by Slovakia, where prices have risen by 31.2%, Russia is 26.9% ahead and Bulgaria is up 26.8%.

But in each case, growth has slowed sharply, suggesting they are reaching a turning point. In Slovakia, growth compared with the second quarter had slowed to 4.9%, in Russia the figure was 4.2% and in Bulgaria 3%.

"There are signs that some of the strongest performers of previous quarters are starting to weaken," Barnes said.

The data also highlights the speed with which the British economy has reversed compared to others. In the same survey a year ago, Britain was showing annual house price growth of 9.5%, placing it 22nd in the rankings.

Dubai, included in the survey for the first time, is showing a 76.1% growth in house prices compared to the third quarter of 2007. Even in the oil-rich state demand is dropping, with prices easing at 15.7% against 42.4% in the second quarter.

Source: ' Guardian '

View All Latest News