Salar posted on November 14, 2011 05:33
Global housing markets under pressure and other than a few pickets of resistance in Uk and other traditionally strong markets, the world's housing markets were on balance weaker during the year ending in the second quarter of 2011, according to the first-ever published survey covering the Q2 2011 data, released today by the Global Property Guide, which traditionally publishes global housing data ahead of other research houses. Housing markets were particularly weak in Europe and the US.
Few European countries' markets rose, most fell, and many worse-hit countries such as Ireland, Greece and Spain performed even worse this year than last year. The US figures were also disappointing, due to high unemployment.
US housing market alarmingly weak
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).
US home values were pushed down by foreclosures, despite the lowest mortgage interest rates for over half a century. The homes for sale inventory averaged 3.7 million during the second quarter, the highest since Q3 2010, according to the National Association of Realtors (NAR).
The key factor driving US foreclosures is the continued high unemployment rate. During the second quarter, unemployment in the US stood at 9.1%.
European housing markets have been weak
Prices of houses in Europe generally fell lower during the year to the second quarter of 2011. In fact, most European countries experienced faster rates of decline than last year.
The data can be grouped into several categories: a) faster declines this year than last, b) recoveries last year which have turned into declines, c) continued declines, but not as severe as last year, and d) actual recoveries (a small category).
Several European countries which saw house price falls last year performed even worse this year. Ireland had the worst house price decline among all reporting countries in our survey over the twelve 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.