Although the US housing market is showing a slight recovery house prices are generally still on a worldwide downwards trend reports the Global Property Guide.

Asia is weakening, and house price falls in the worst-hit European countries are dramatically acceleratingsays the guide. (see table below.)

The figures that the GPG produce are adjusted for inflation; they are therefore a more accurate reflection of the situation than relying on purely nominal price data.

For example, the UK nominal data based on the Nationwide Building Society shows a slight improvement from a year-on-year price fall of 1.16% last year to a smaller drop of 1.07 in Q2 this year. But when adjusted for inflation it shows that house prices fell by 5.3% year on year to Q2 2011 and fell by 3.42% year on year to Q2 this year. That shows that when taking inflation into account, although things are improving (if you already own a house) in the UK we are still firmly in negative territory and there’s a longer way to go than mere nominal figures would indicate.

In Europe as a whole house prices fell in 15 of the 22 countries for which data was available. Ireland was the big loser where its residential property index dropped like a stone by 16.85% y0y to Q2 2012. It also fell by 2.91% within Q2.

Then came Spain (-13.18%), Greece (-11.92%), Portugal (-10.95%), Warsaw, Netherlands (-10.12%), Poland (-8.19%), and Cyprus (-7.68%), the Slovak Republic (-5.61%) and Sweden (-4.18%) with all but the Slovak Republic seeing bigger house price falls this year than last year.

But for North America the recovery is here says the Guide.

The Federal Housing Finance Agency’s seasonally adjusted purchase only price index rose by 1.12% yoy compared to last year’s dismal fall of 8.76%.

Canada also saw price rises with its eleven major cities experiencing a 4.06% rise over the year.

And the growth that Asian countries have seen appears to be running out of some steam. India for example saw a price rise of 6.23%, but compare that with last year’s staggering 22.7% rise.

The strongest performer according to the Guide was Sao Paulo, Brazil, which saw prices advance over the year to Q2 by 15.56%, but this may now be slowing as the final quarter only saw a rise of 2.38%.

On an inflation adjusted measure house prices fell in 25 countries out of the 39 for which data is available and they rose in only 15.

Global Property Guide-2012 Q2

Global Property Guide-2012 Q2

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