Europe’s house price growth continues to moderate, whereas prices in Asia-Pacific are heating up, according to indices assembled by the Global Property Guide (www.globalpropertyguide.com), based on country sources, for the second quarter (Q2) of 2007.
House prices in the Baltics skyrocketed in 2005 and 2006. Latvia, Lithuania and Estonia experienced at least 25% annual increases during 2005-2006. House price growth peaked at 71% y-o-y to Q1 2006 in Estonia.
Despite the slowing of house prices in the Baltics in Q2 2007, over the past year the Baltic countries were still among the top five performers in the world.
In Latvia, house prices started dropping in June 2007, according to Latio, Latvia’s leading research-oriented realtor. Over the year, house price growth slowed to 35.41% in Q2 2007, from 52.13% y-o-y to Q2 2006. Latvia’s economy is the fastest-growing in Europe but signs of overheating have been observed.
Estonia’s slowdown was in evidence early this year when a meager house price increase of 5% y-o-y to Q1 2007 was revealed. House prices rose by 18.98% y-o-y to Q2 2007, still inferior compared to the 54.29% increase y-o-y to Q2 2006. Higher interest rates and stricter mortgage policies contributed to the slowdown.
Lithuania’s house price growth remained at 25% y-o-y to Q2 2007. Indicators suggest Lithuania is the most economically stable among Baltic countries.
The US housing crisis
In the US, house prices have increased by only 3.19% y-o-y to Q2 2007, down from 9.98% y-o-y to Q2 2006. This is the lowest annual growth recorded in almost ten years. Compared to Q1 2007, house prices were up by only 0.1% in Q2 2007. … more about this »