According to Knight Frank’s latest Global House Price Index, global housing markets continue to struggle against a backcloth of economic stagnation or decline and rising unemployment.

Israel was the top performer over the 12-month period ending Q1 2009 recording growth of +10.9%. The worst performers were Latvia, Dubai and Singapore who recorded falls in average prices of, respectively, 36%, 32% and 23%

On a quarterly basis, the most dramatic fall in prices were recorded by Dubai (-40%) and Singapore (-16.2%). The best performing markets were Thailand with a +2.7% uplift in values, Israel (+2.6%) and Switzerland (+2.1%). The shorter term economic outlook suggests that the world’s housing markets are likely to continue to suffer for the remainder of 2009

Nick Barnes, head of international research, Knight Frank, said: “The world’s housing markets remain under intense pressure with little real evidence of any of the hoped for ‘green shoots’ and even the improvement in performance shown in some countries in the last quarter may yet turn out to be a false dawn according to some commentators. Recent projections from the Organisation for Economic Co-Operation and Development (OECD) do little to promote a more optimistic viewpoint – gross domestic product (GDP) growth is forecast to drop by an average -4.3% in the OECD area in 2009 while by the end of 2010 unemployment rates in many countries will reach double figures for the first time since the early 1990s.

“The inescapable trend is that the worst and most widespread economic recession since the 1930s continues to batter housing markets across the globe. Rising unemployment and concern among those still in jobs, added to constrained credit conditions, means that buyer demand for housing remains suppressed and confidence is low in most markets which is inevitably having a negative impact on house prices. There is sporadic evidence of buyers snapping up relative bargains, however of those buyers in a position to move, many are still waiting for clearer signs that markets are approaching the bottom of the cycle. Moreover, in a falling market, sellers are usually forced to a greater or lesser extent which means that opportunities to buy are greatly reduced and transaction volumes correspondingly low.”