The 12 Worst Housing Markets In The World

Leaning apartment building epitomizes falling housing pricesHousing keeps falling. (In this case, to the right.)

Photo: Håkan Dahlström

Knight Frank’s report on the state of housing markets worldwide shows exactly how hard Europe is getting pummelled.South America has seen home prices rise by 9.8 per cent, while prices in Asia Pacific have gone up 4.2 per cent in the past 12 months. By contrast, home prices in the Eurozone’s 17 member states have averaged a 1.8 per cent decline over the same time period.

From the report:

With the Eurozone now in its second recession in three years buyer confidence is at an all-time low and it is no coincidence that all the bottom 12 rankings are occupied by European countries this quarter.

We’ve compiled Knight Frank’s list of the housing markets experiencing the worst year-over-year declines, listed from smallest to largest decrease in home values.

Italy

Q3 2011 - Q2 2012:
-3.5 per cent

6-month change:
-2.0 per cent

3-month change:
-1.0 per cent

Demand for expensive homes (over € 3 million) has remained strong. The value of prime property has dropped by about 20 per cent since 2008.

Source: Knight Frank

Poland

Q3 2011 - Q2 2012:
-4.6 per cent

6-month change:
-2.5 per cent

3-month change:
-2.2 per cent

Investment in commercial properties slowed in 1H 2012, though the vacancy rate rose to 9.3 per cent as more projects reached completion. Approximately 425,000 sq. miles of new office space is expected to be added to Warsaw by year-end 2013.

Source: Knight Frank

Croatia

Q3 2011 - Q3 2012:
-5.2 per cent

6-month change:
-3.3 per cent

3-month change:
-1.9 per cent

The mortgage market spiked from 4.7 to 18 per cent of GDP from 2000 to 2010. Home prices are expected to fall 10 per cent by year-end 2012.

Source: Knight Frank, Global Property Guide

Denmark

Q3 2011 - Q2 2012:
-5.4 per cent

6-month change:
+1.4 per cent

3-month change:
+1.0 per cent

Bloomberg reports that the housing market has 'slumped about 25 per cent since peaking in 2007.' The IMF's Tom Dorsey recently warned that home values may continue to decline.

Source: Knight Frank, Businessweek

Hungary

Q3 2011 - Q2 2012:
-5.7 per cent

6-month change:
-2.9 per cent

3-month change:
+0.1 per cent

Bloomberg reports that transaction volumes have tanked from their peak in 2003 (approximately 270,000) to just 90,000 in 2011. Taking inflation into account, home values have fallen by 30 per cent from 2008 through 2011.

Source: Knight Frank, Bloomberg

Cyprus

Q3 2011 - Q2 2012:
-5.9 per cent

6-month change:
-3.0 per cent

3-month change:
-2.0 per cent

Home prices fell 12% from their peak in Q3 2008 through Q2 2011. Transaction volumes have plummeted from over 21,000 in 2007 to 7,018 in 2011.

Source: Knight Frank

Portugal

Q3 2011 - Q3 2012:
-7.0 per cent

6-month change:
-2.4 per cent

3-month change:
-1.2 per cent

Prime prices in the popular Western Algarve region have dropped by 20% from their 2007 peak. Due to the strength of the franc, Swiss buyers would realise a 35 per cent discount by purchasing a Portuguese home.

Source: Knight Frank

Netherlands

Q3 2011 - Q3 2012:
-7.9 per cent

6-month change:
-5.1 per cent

3-month change:
-4.7 per cent

Netherlands has 17 million people in an area the size of New Hampshire and Vermont, which constrains the availability and supply of housing. The Epoch Times reports that this has caused lenders to adopt very loose standards in regards to mortgage loans.

Source: Knight Frank, The Epoch Times

Romania

Q3 2011 - Q2 2012:
-8.9 per cent

6-month change:
+3.1 per cent

3-month change:
-0.6 per cent

New office supply in Bucharest is down 70 per cent year-over-year for 1H 2012. The overall vacancy rate increased to 16% in the first half of 2012.

Source: Knight Frank

Spain

Q3 2011 - Q3 2012:
-9.3 per cent

6-month change:
-4.9 per cent

3-month change:
-2.4 per cent

House prices have fallen by 23 per cent since Q1 2008. 90 per cent of the estimated million properties unsold in Spain are valued between €100,000 and €200,000.

Source: Knight Frank

Ireland

Q3 2011 - Q3 2012:
-9.6 per cent

6-month change:
-0.5 per cent

3-month change:
+1.5 per cent

Northern Ireland has been hit especially hard, with home values dropping 19.5 per cent in the past year. Apartment values have been decimated over the last 12 months, plummeting by 22.7 per cent.

Source: Knight Frank, Lurgan Mail

Greece

Q3 2011 - Q3 2012:
-11.7 per cent

6-month change:
-6.4 per cent

3-month change:
-3.6 per cent

The Greek Reporter indicates that new home stares are down 80 per cent over the past five years. Newly-built homes have decreased in value significantly as of late, falling 13.5 per cent from July to September.

Source: Knight Frank, Greek Reporter

Now, check out the places where housing is booming:

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