Cash rich Fly to Let investors will be studying the slide in the world’s housing markets to see if there are opportunities to snap up bargains in places where property prices are most likely to rise again in the near future.

According to Globalpropertyguide.com the tumble in the financial markets caused a fall in inflation-adjusted house prices in 21 out of 33 countries during the year to end-Q2 2008.

The Baltics, the US, the UK and Ireland led the global decline but the biggest house price declines took place in Latvia, previously a leader of the global house price boom. House prices in Riga have fallen by 21.23 percent in nominal terms during the year to end-Q2 2008, and 33.08 percent in real terms. Prices in Estonia’s Tallinn fell during the year by 11.02 percent in nominal terms, and 14.06 percent in real terms.

Even in countries which have continued to record house prices rises over the past year such as China (Shanghai was up 36.32 percent year-on-year in nominal terms at the end of Q2 2008, 27.28 percent in inflation-adjusted terms), transaction volumes have fallen sharply, suggesting that buyers are now nervous.

While property markets in some regions such as the Middle East apparently remain in boom, it is hard to confirm this by reliable data. With the exception of Israel, none of Middle East’s property registries, statistical institutes or central banks publish good quality data on housing markets. 

In Slovakia’s house prices are still accelerating, having risen 32.20 percent this year (a rise of 25.57 percent in inflation-adjusted terms), as against a rise of 20.47 percent year on year to end-Q2 2007 (a rise of 17.56 percent in inflation-adjusted terms).

Clearly, the boom in Eastern Europe is not entirely finished. There have also been strong price increases in Monaco, Montenegro and Albania, although no official house price statistics are available. 

The efforts to rescue the world’s housing markets are becoming increasingly global.

In the US, the authorities are seeking a US$700 billion ‘mother of all bailouts’ package to purchase almost all of the country’s bad mortgage debt in an effort to unfreeze the nation’s credit markets.

In the year to end-Q2 2008, house prices in major US cities fell 15.4 percent (18.9 percent in real terms) from a year earlier, according to the Case-Shiller house price index. It was the sixth consecutive quarter that the house price index dropped year-on-year.

In the year to end-Q2 2008, house prices in Spain rose two percent (a fall of 2.49 percent in real terms) from a year earlier, according to official statistics (which may be understating the problem).

Thailand and Indonesia are mulling the relaxation of foreign ownership limits to lift their housing markets.

During the year to end-Q2 2008, house prices in Indonesia rose 5.60 percent (a fall of 4.18 percent in real terms), according to official statistics.

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