In Europe, rising real estate prices

05.10.2010 15:53
Real Estate Market Analysis | In Europe, rising real estate prices In more than half of the world, housing prices are rising.

In 61% of countries have positive growth in home prices. This is significantly higher than a year ago, which was 35% and, according to the company Knight Frank, reflecting renewed growth in the real estate market.

At the same time as at mid 2010 prices on the world's housing markets in comparison to pre-crisis years of 2006-2008 dropped by 9%, says Case.

Analysts say - like the dynamics associated with a sharp and widespread decline in prices in late 2008. In the main part of the world falls in value amounted to 40%.

"Today's price increase is still far from pre-crisis. They recovered slightly, while the earlier transaction price was higher, but now everything has shifted to the segment of economy class, as a result suffers elite real estate. If you previously in this segment of the total number of transactions was up 15%, now 8.7% ", - says Sergey Kostecki, Senior Analyst, SV Development.

Market players say that the business class, too, is suffering, but the economy segment to bolster the trend towards recovery. "The number of budget proposals is reduced, and the crisis wave passes through it concerns practically the whole of Europe" - he continues.

"An analysis of quarterly results of growth assumes that markets in some of the most poorly coping regions such as the Baltic states and Ukraine, have received some kind of a breather, because prices are falling more slowly than previously.

Prices in Estonia, for example, fell by 40% during the 12 months to June 2010, but actually increased by 0.4% during the second quarter of the year ", - says Mikhail Ermolenko, CEO of Knight Frank LLC Ukraine. In Asia, prices continue to rise, despite strenuous attempts by governments to control and limit price increases.

The Chinese market has reached excellent results in recent years, but there is increasing evidence that the rapid slowdown in price growth was the result of concerted government action undertaken in order to avoid artificially inflating the economic recovery.

Political risks have been one of the main driving forces behind rising prices and demand for housing in the most "international" markets. For example, in Europe, including London and the main southern European markets in the U.S., including Florida and New York, as well as the main Asian and South American markets, the secondary housing. saw the rise of activity in international trade.

"In the 12 months to June this year 50% of all new apartments being built in central London, were bought by foreign nationals. World economic growth is equivalent to the reduction of restrictions on capital transfer. Growing number of places where it became easier to move capital from one country to another "- says Ermolenko.

For example, in Monaco last month sold a penthouse for $ 306, 5 million, thereby setting a new record for the value of the transaction in the global real estate market. earlier in London set a world record price for an apartment - a penthouse at Hyde Park sold for 140 million pounds (220 million U.S. dollars).

According to experts the agency next year, prices continue to rise, and in Western Europe shelter increases of 2-3%, Singapore - 3%, China - 5%.

"East will continue to rise in the price - China, Japan. In the U.S., especially anything of interest should not expect, if growth and will be something very minor. If we talk about Europe, it is possible to predict the growth to 5%, no more "- sums up Kostecki.

Countries which are the worst acted downturn in the housing market - Spain, Ireland and some Eastern European countries - do not see a period of recovery during 2009 or early 2010. In fact, prices in some parts of Ireland is now almost 50% below their peak in 2006.

Over the next 18 months, these markets will experience a further decline in prices, although the pace of decline slowed down from -11% projected in Ireland in 2010 to -3% in 2011. The next year is expected the first three years the rise in prices on the most problematic markets such as Eastern Europe, Latvia and Lithuania.

A key factor in these regions is that prices are actually beginning to return to "sustainable" level. This is partly because the relation between prices, rents and incomes more equal to their long-term averages.

"We expect that UK rates will fall in the second half of 2010 due to the introduction of government austerity measures such as tax increases and spending cuts, but most importantly - due to the reduction of the mortgage market. However, a modest drop of 3.3% per year is not associated with the risk of more significant in the case of a sharp rise in interest rates, expected in 2011 "- say at Knight Frank.
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Content tags: Overseas property
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