While European property price increases started to slow in the second quarter, research from the Global Property Guide shows that prices in the Asia-Pacific region started to really take off.
Eastern Europe had been leading growth until recently, with house prices in the Baltics rising rapidly in 2005 and 2006. Latvia, Lithuania and Estonia saw prices rise by 25 per cent or more during these years, while Estonia’s price growth for the first quarter of 2006 was an incredible 71 per cent.
Many European housing markets were affected by higher interest rates in the second quarter, “with the European Central Bank raising key interest rates to four per cent in June – the highest level for six years”, cites the Global Property Guide.
Prices in Ireland rose by just 0.9 per cent compared with 15.2 per cent growth in the second quarter of 2006. Meanwhile, Spain saw its lowest price growth for nine years. By contrast, Bulgarian prices grew 27.1 per cent, while Norway and the UK also registered double-digit growth.
The second quarter saw just a 3.2 per cent increase in the US compared with the second quarter in 2006, which saw house price growth of 10 per cent. According to the Global Property Guide, “this is the lowest annual growth seen in the US for almost ten years”.
Perhaps surprisingly, prices in the Asia-Pacific region appeared most promising during the second quarter, with Singapore recording “remarkable house price growth of 21.1 per cent”, according to the Guide, up from 6.1 per cent in the prior-year period.
The Philippines posted a rise of 14.3 per cent, Hong Kong prices were up 8.8 per cent and Japan has recovered from its 15-year decline with a 7.8 per cent increase. Australia’s prices rose by 9.5 per cent compared with 7 per cent last year and New Zealand’s house prices rose by 12.1 per cent.
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