Ireland endures worst average house price fall in global survey
Ireland had the worst average house price decline among all reporting countries in the Global Property Guide survey over the 12 months to Q2, 2011.
House prices were down by 14.84% year-on-year, an even worse decline than the 11.83% fall the previous year.
The only European countries which experienced weaker performances than the previous year include Netherlands (-4.07%), Slovak Republic (-6.49%), Croatia (-6.55%), Spain (-8.43%) and Athens, Greece (-9.88%) (all figures inflation-adjusted).
In the UK, average house prices were down by 5.33% year-on-year, after rising 6.04% the previous year.
The housing market began rebounding as early as Q4 2009, but started falling again in the last quarter of 2010.
Norway led the small group of European countries which experienced house price increases, up by 5.93% over the year to end Q2, 2011.
Norway’s housing market began to rebound in Q3 2009 and has not slowed, driven by low interest rates and strong economic growth (4.8% more than a year earlier).
Housing markets in Estonia (Tallinn), France and Iceland rose during the year to end Q2, 2011 after suffering house price falls in the previous year.
In Tallinn, house prices were up 4.94% year-on-year, after last year’s fall of 0.66%. In France (data is from FNAIM), prices of existing dwellings rose 4.65% year-on-year, after a fall of 1.71% the previous year.
In Iceland, house prices rose slightly by 0.60% year-on-year, after plunging by 9.04% during the previous year.
US house prices fell 9.05% after inflation (a 5.93% decline in nominal terms) in the second quarter from a year earlier, the largest decline since 2009, according to the Federal Finance Housing Agency (FHFA). During the quarter, house prices dropped 2.33% after inflation (a fall of 0.63% in nominal terms).
“House prices are still over-stretched in many countries, and developed world economies are still weak, so price-falls were to be expected,” said Matthew Montagu-Pollock, publisher of the Global Property Guide.
“Low interest rates will be positive for housing, but only if the underlying economies recover.
“And recovery will ultimately bring a sting in the tail, because higher inflation would eventually bring higher nominal interest rates, choking strong upward house price movements.”
