International House Price Falls Opportunuty For Investors

  • 14 years ago
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23/04/10- The latest Knight Frank Global House Price Index shows good news for Hong Kong and some bad news for Dubai, Estonia and Latvia.
 
International real estate investors will read with interest the locations that saw overall prices around the world falling on average by 3.8%.
 
Three locations saw price falls by more than 40%: Estonia -40%, Dubai -42% and Latvia -50%)   Liam Bailey, head of residential research, Knight Frank, commented: The recovery in global housing markets is still proving somewhat shaky. Although a number of locations saw staggering growth of up to 28% in 2009, prices were still falling in almost half of the countries in our index during the final three months of the year.
 
Price drops may help boost a region with those seeking to maximise profits and the region that have seen the biggest falls may be of most interest to investors.
 
Nicholas Marr director at the Overseas Property portal Homesgofast.com “Seasoned overseas property investors know that profits are made on the purchase not only on the sale of real estate. Dubai in particular is now offering some outstanding bargains and the price falls may well be a great opportunity.”
 
The country with the highest growth was Hong Kong with prices rising by nearly 30%  
 
There remains a very clear polarisation between the locations at the top and bottom of our table.
 
Five countries posted double-digit growth last year, but nine actually saw prices fall by over 10%. 
 
 Prices in Hong Kong and Mainland China increased by over 25%, driven upwards by a massive injection of liquidity into the economy by the Chinese government s fiscal stimulus package. Prices do appear to be levelling off though with final quarter increases of only 2.9% in Hong Kong. 
 
The Australian economy has also benefited from China s rapid recovery from the global recession and the country s house prices increased by 13.6%, with particularly strong growth of 5.2% in the final quarter of the year.
 
 A continuing desire by Israelis to invest in property rather than equities, other less tangible asset classes and low yielding deposit accounts helped push overall price growth during 2009 up by 21.3%. According to the Jewish Chronicle 50% of Israeli houses are being purchased as second homes.
 
 At the other end of the scale, Ukraine and the Baltic states (Estonia, Latvia and Lithuania), as well as Ireland and Dubai, continue to be hit hard by the fall out from the credit crunch and prices corrected sharply last year. The positive news for these locations is that prices do seem to have stabilised with most reporting minimal falls or even slight growth in the final three months of the year.

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