The recovery seen in the global housing market in the latter part of 2009 and into 2010, has stalled badly in the latter part of 2010, according to the latest figures from the Global Property Guide. This is a blow for the industry and everyone involved in it, though it is truer to what economies are currently capable of supporting, and from here should allow us to find a steadier path back to a true recovery.
Looking at the Global Property Guide’s index of global house prices, — which measures prices after inflation for a more realistic picture — we see the global housing market turning towards recovery at the end of 2009. In fact the Q4 index showed that, on a quarterly basis, prices had risen in 22 out of the 34 markets providing data, though the year on year data still showed depression.
This continued to improve, but became patchy as Europe fell into the sovereign debt crisis, none the less the recovery built to the point of the Q3 headline: Global house prices: half the world up, half the world down. This is beaten only by the opening line from the Q1 2010 release which boldly proclaimed “The global housing bust is effectively over.”
But here we are in Q4 of 2010 with the headline: The world’s housing market recovery has stalled: house price survey for the year 2010.
Leading the negative news is the fact that US house prices fell further in 2010 than in 2009, knocking hopes of a turnaround stateside.
According to the FHFA’s purchase-only index, ouse prices in the United States fell by 1.13% in Q4, or by 5.16% over the year 2010. The Case-Shiller index was even more negative, as it slipped by 5.30% during 2010 and fell 2.36% in Q4 2010.
“The market still seems far from the bottom, and further price falls may occur if oil prices rise, especially as the number of foreclosures continues to be high,” said the report.
Unsurprisingly the index also points out that Ireland, Bulgaria, Hungary, Lithuania Greece and Ukraine are also still suffering badly. Eastern Europe was also mentioned in the negative, though it said prices did fall less in 2010 than in 2009.
In the Baltic region, the strong growth seen in Latvia and Estonia has now petered out, and the boom in Scandinavia is also coming to an end, the index said. For Asia, the report mentioned growth in Japan, Taiwan, Thailand and other parts of Asia, but said the Singapore boom is largely over.
The other noteworthy findings were that growth slowed in France and Switzerland, from 3.39% and 1.87% respectively in 2009, to 0.80% and 0.33% respectively in 2010. The statistical breakdown for the former Soviet Bloc is below, and below that the index chart graphic, showing all figures.
- In Bulgaria, house prices fell 9.51% in 2010, after falls of 26.36% the previous year.
- In Hungary, house prices fell 6.66% in 2010, after falling 15.66% last year.
- In the Slovak Republic, house prices fell 3.14% in 2010, after falling 12.70% the previous year.
- In Croatia, prices fell 5.06% in 2010, after falling 2.39% the previous year.
- In Poland, house prices in the capital city, Warsaw, were down 2.19% in 2010, after falling 8.09% the previous year.
- Slovenia’s house prices were down 2.69%, after falling 5.22% the previous year.
- In Lithuania, house prices fell by 6.76%, after price falls of 29.29% the previous year.
- Ukraine’s house prices fell by 9.47% in 2010 (not adjusted for inflation), after a fall of 30.22% in 2009.