Property prices around the world were still dropping during the second quarter of 2012, according to the latest Global Property Guide survey.
The survey tracks property values in 38 countries – and revealed that prices slipped back in 24, increased in 13 and one – the USA – returned mixed results.
Generally, 20 housing markets performed worse year-on-year in the second quarter of 2012 than in the same period last year, while 18 countries performed better.
The bad news was in Europe, where house prices are failing to rally and sinking at a rate of 10% or more year-on-year in Ireland, Spain, Portugal and Italy. Poland and Cyprus are also teetering on the edge of collapse, claims the survey.
Banks in Spain are reportedly offloading repossessed homes at bargain basement prices of up to 70% off their peak market value in 2006.
Spanish banks are concerned the government will open a ‘bad bank’ selling homes at massive discounts, driving down prices even further and want to try to capitalise on their assets before the upcoming end of the holiday season.
House prices fell in 15 of 22 European countries where the survey tracks values.
Ireland continued to clutch the wooden spoon as the world’s weakest housing market as prices plunged 16.85% year-on-year and 2.91% in the past three months.
The next eight weakest housing markets were all in Europe, including Spain (-12.49%) , Greece (-11.92%), Portugal (-10.95%), Warsaw, Poland (-8.19%), Cyprus (-7.68%), and Netherlands (-6.28%), the Slovak Republic (-5.61%) and Sweden (-4.18%).
All these countries except the Slovak Republic recorded bigger drops in value in the last quarter than a year ago.
Places with moderate year-on-year house price falls included Bulgaria (-3.87%), the UK (-3.8%), Vilnius, Lithuania (-3.07%), Romania (-2.71%), Finland (-2.22%), and Russia (-2.08%).
Prices went up in Norway (6.26%), Germany (5.24%), Switzerland (4.86%), Estonia (2.83%), Turkey (2.57%), Riga, Latvia (2.5%), and Iceland (1.72%).
In the United States , the FHFA’s seasonally adjusted purchase-only house price index rose 1.12% year-on-year in Q2 2012, in sharp contrast with the 8.76% decline year-on-year in Q2 2011.
“Although some housing markets are still facing significant challenges, house prices were quite strong in most areas in the second quarter,” said Andrew Leventis of FHFA. “The strong appreciation may partially reflect fewer homes sold in distress, but declining mortgage rates and a modest supply of homes available for sale likely account for most of the price increase.”
The best performing market in the survey was Sao Paulo , Brazil , where prices soared 15.56% in the past year, although the rate of capital appreciation is slowing.