A summary of the findings of this index are as follows:

• House prices increased in nearly half of the reporting countries, suggesting a possible recovery may be on the horizon

• The quarterly drop in house prices worsened in fewer than 25% of these locations

• Israel is the top performer from 2Q 2008 to 2Q 2009, with an annual increase in house prices of 12.5%

• Taken quarterly, Norway saw the largest increase from Q1 2009 of 5.3%

• Dubai was the biggest loser over the year, dropping 47%, and was second worst on a quarterly basis, losing 7.5% from Q1 2009

Liam Bailey, head of residential research for Knight Frank has assessed the data and takes the following from it:

House prices are beginning to stabilise across the world, since price falls worsened in pace in only 22% of locations and did not exceed a 10% fall in any country. This compares to double-digit falls during the first quarter of the year in several locations.

Israel performed strongly, being the only place with double-digit growth from June 2008 to 2009 of 12.5%. Other countries, including Norway with a quarterly gain of 5.3%, also recorded prices increases. Scandinavia as a whole is doing well, possibly because it did not experience the great price increases of the boom years, so has had less to correct. Construction there has tailed off significantly, with Sweden building 45% fewer houses in Q1 and Q2 of 2009 compared to the same period a year before. Norway is building at the lowest level since 2000.

The UK housing market rose slightly by 1.1% in the second quarter, and even the US, where the whole crisis began, saw a 1.3% rise in prices in Q2 compared to falls of 7% in Q1 2009 and Q4 of 2008.

Dubai is still suffering falling prices, having lost nearly 50% already, but the Q2 fall was “only” 7.5% compared to 41% during Q1, so the decline may be starting to ease off. Despite a huge oversupply of property there, transactions are beginning to rise due to a combination of low prices attracting buyers, more available credit, and developers being more willing to offer completion dates on their projects.

Overall, however, the market is still highly weakened and remains in a fragile state. Bulgaria saw a 9.7% fall in prices in Q2, which is better than the 12.4% in Q1, but still a significant indicator that certain locations are continuing to suffer. Caution is advised even where prices have been on the increase, as Thailand showed a fall of 5.6% in Q2 following a rise of 2.7% in Q1.

Liam Bailey’s final comment, however, is that “it does appear the worst is behind us”.