House prices continue to recover across the globe with almost 70% of countries recording growth in values during the third quarter of 2009 according to a new report.
The Knight Frank Global Price Index showed Israel leading the charge, with property values surging by 13.7% over the year to Q3 2009. Australia came in fifth with 6.20% growth.
On a quarterly basis, Singapore saw the biggest jump in prices, up 15.2% during the third quarter of the year according to the report. Dubai racked up the largest annual drop of -47%, but managed to post a small gain during the third quarter.
"House prices are now rising in clear majority of locations around the world with almost 70% of the locations in the Knight Frank Global Price Index reporting growth in the third quarter of 2009. This compares with under 50% during the second three months of the year," said Liam Bailey, head of residential research, Knight Frank.
Israel remains the best performer on an annual basis and is the only country to have recorded a double-digit growth during the past 12 months according to the report. Prices in Dubai have fallen the most, despite posting a small recovery of 1.2% in the third quarter.
"The recent debt issues with Dubai World and the subsequent loss of confidence by investors means even this nascent rally is already under threat," said Bailey.
Despite being hit extremely hard initially, the UK is staging a strong comeback as a shortage of houses for sale is contributing to the rising values with demand outstripping supply.
Many Asian economies are also performing strongly with quarterly growth of 6% in Hong Kong and 2.5% in mainland China according to Knight Frank. Singapore recorded a stunning 15.2% jump in values during the third quarter alone.
Bailey noted the strength in recovery is already fuelling talks of another bubble forming, however he said it is worth noting that house prices in almost 60% of the countries in the index are still lower than they were a year ago. "That is not to say prices are on a guaranteed one-way trajectory - the global recovery from recession is unlikely to be trouble-free as the recent problems in Dubai have highlighted - but it does seem that any further falls are likely to be corrections rather than the start of another round if drastic reductions," he said.
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