Everyone’s trying to talk up house prices; they’re still falling in most countries, according to the underlying statistics worldwide.
Housing bubble fears may cause concern in the UK, Dubai, Hong Kong and Singapore as speculators hijack home sales and lock out first time buyers who need to wheelbarrow large wads of cash into banks in a bid to beg for a mortgage.
However, the truth is official house price figures show a different story.
In many countries, like the US and Dubai, house prices are rising and have continued an upward trend for a considerable time.
International markets
But…and it is quite a big but…in many housing markets, property values are still between 20% and 50% below their peak prices between 2006 and 2008.
- In the US, in many places, house values are 30% below their peak
- In the United Arab Emirates, home values are rising fast in Dubai and Abu Dhabi, but are up to 50% below their peak
- In Spain, prices are 17% down year-on-year and that’s on top of at least a 30% drop in the five years since 2008
The latest house price values for the second quarter of 2013 for European Union have been released by Eurostat, the official EU statistics organisation.
The study shows the highest annual rates of increase were in Latvia (8.8%), Estonia (8.1%) and Luxembourg (5.1%).
The EU nations with the biggest year-on-year drop in property prices were Croatia (19.7%), Spain (10.6%) and The Netherlands (7.5%).
Croatia joined the EU in July 2013.
Modest price changes
On average house prices shifted up a modest 0.3% in the quarter, and slipped 2.5% in the year in the single currency zone. For the European Union as a whole, home values increased 0.4% in the quarter, but nudged down 1.3 year-on-year.
Looking at quarterly changes, the largest rises in property values were in Latvia (5.1%), Estonia (3.7%) and Denmark (3.1%), while the largest drops were in Croatia (6.5%), The Netherlands (2%) and Hungary (0.9%).
In the UK, prices rose 1.8% in the quarter and 2.9% compared with the 12 months before.
Mortgage rates are not expected to change much in the next few months as the US Federal Reserve, the Bank of England and the European Central Bank have all signalled no change until at least some time in 2014.
The Bank of England monetary policy committee voted to keep the base rate at 0.5% again this week.
