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(** A GLOBAL bubble?? Curiouser and curiouser. George, whose been
pulling your strings?? Or, should I say...chain? - D **)<br>
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<h1 id="heading-alone" class="article-no-standfirst">House price crash
goes global</h1>
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<li class="byline"> <a set="yes" linkindex="23"
href="http://www.guardian.co.uk/profile/patrickcollinson"
name="&lid={contentTypeByline}{Patrick Collinson}&lpos={contentTypeByline}{1}">Patrick
Collinson</a> </li>
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<li class="date">Tuesday September 02 2008 12:40 BST</li>
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<div class="image"> <img src="cid:part1.04060101.06040402@mailbag.com"
alt="Riga Town, Latvia" height="276" width="460">
<p class="caption">Latvia: House prices have dropped by 24.1% over the
past 12 months</p>
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<p>The <a linkindex="25"
href="http://www.guardian.co.uk/money/property">property</a>
crash that began in the US is spreading across the globe, according to
international estate agents Knight Frank, which said today that steep
declines are now taking place across Europe and into Asia. </p>
<p>The country recording the sharpest fall is Latvia, where <a
linkindex="26" href="http://www.guardian.co.uk/money/houseprices">house
prices</a>
have plummeted 24.1% over the past year. New Zealand, Denmark and
Lithuania have all seen falling prices, along with Malta, Germany,
Ireland, Estonia, Britain and the US. </p>
<p>Even countries where prices have not fallen are witnessing a rapid
deceleration in price growth.</p>
<p>In
South Africa the rate of house price inflation has collapsed from 15.5%
this time last year to 3.8%, and is expected to be negative soon. In
France, Spain and Greece price growth has halved and is running below
3.2%.</p>
<p>The only countries to have bucked the trend are Bulgaria,
Slovakia, Cyprus and the Czech Republic, where house price growth has
accelerated.</p>
<p>Last year's fastest growing market, Russia, which
was seeing house price growth at an astonishing 53.7% in the second
quarter of 2007, has dropped back to 26.5%. </p>
<p>Nick Barnes, head
of international research at Knight Frank, said: "The index shows that
global house price inflation is continuing to fall back, with much of
continental Europe now seeing low or negative growth.</p>
<p>"Housing
markets in countries such as Spain, Denmark, the UK and Ireland are all
being severely challenged by the global credit squeeze." </p>
<h2>Long-term decline</h2>
<p>Globally,
the rate of house price growth fell to 4.8% in the second quarter of
2008, down from 6.1% in the first quarter of the year. </p>
<p>Several
countries are now entering their second year of house price declines.
Among the worst hit is Germany, where prices were falling at a rate of
4.4% last year and 2.5% this year. </p>
<p>"There is less demand for
owner-occupied property in Germany than in many other European
countries and there is no shortage of supply," said Barnes.</p>
<p>In Spain, the Knight Frank index recorded a price rise of 2.4%
annually, but it warned that falls are now almost inevitable.</p>
<p>"The
well-publicised problems in Spain have not yet fed into house price
statistics. So far, price falls have been concentrated in the coastal
resorts and among new developments in the large cities," said Barnes.</p>
<p>"Spain
looks likely to fall into recession later this year, and house sales
fell steeply during June. The number of sales dropped by 34.2% in May
and 29.6% in June, suggesting that wider price falls could be imminent."</p>
<p>But
investors who bought second homes in Bulgaria have reason to feel
bullish. Knight Frank said current annual price growth is 32.2%, only
slightly lower than the 33.7% rate recorded in the first quarter.</p>
<h2>Biggest fallers: Year-on-year house price change to Q2 2008</h2>
<p>Latvia -24.1%<br>
United States -16.8%<br>
Estonia -16%<br>
Lithuania -9.9%<br>
Denmark -9.6%<br>
Ireland -8.1%<br>
UK -3.9%<br>
Malta -2.7%<br>
Germany -2.5%<br>
New Zealand -2.2%</p>
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<h1>House price crash goes global</h1>
This article was first published on <a linkindex="27"
href="http://www.guardian.co.uk/"
name="&lid={historyByline}{guardian.co.uk}&lpos={historyByline}{2}">guardian.co.uk</a>
on Tuesday September 02 2008. It was last updated at 12:40 on September
02 2008. </div>
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