Many major global property markets recorded positive price growth in 2008 but by the end of the year that had stopped or fallen in 75% of locations, according to a new report.

There were wide variations in performance around the world with Hong Kong showing the sharpest annual drop in property prices with a fall of 24.5%, the Knight Frank 2009 Wealth Report, shows.

While Bangkok saw residential prices rise by 22.5% and overall just under 50% of the locations featured managed to record positive price growth on an annual basis in 2008.

Other real estate markets saw a drastic change from boom to bust. For example, Dubai recorded annual overall growth of almost 11% but property prices fell by 19% in the last quarter of 2008.

The report, which includes new research from Knight Frank and Citi Private Bank, shows that prime property in Monaco is the most expensive in the world costing an average of €55,000 per square metre for the best properties with London and Manhattan in second and third place.

But despite house price falls almost 55% of high net worth individuals plan to increase their exposure to residential property over the next two years.

Global farmland prices started to slip last year on the back of falling commodity prices, but remain more resilient than residential or commercial property. Exchange rate fluctuations mean affordability in some countries has increased for US dollar and euro-backed buyers, despite strong price increases in local currencies.

‘Covering a period of global wealth destruction rather than creation, the report’s annual analysis of prime residential property markets and the behaviour and attitudes of the wealthy has become even more relevant,’ said Liam Bailey, head of residential research at Knight Frank.

‘Even the world’s richest people have cut their discretionary spending and most desirable prime residential property markets have now been affected by the global downturn. Although almost half the locations in Knight Frank’s Prime International Residential Index managed to show a positive overall return in 2008, price growth had either stalled or started to decline in nearly 75% of them by the end of the final quarter,’ he added.

But it is a positive sign that the rich are committed to property despite the gloom, he added.

Source: http://www.propertywire.com/

More payment plans are being offered to property investors in Dubai is a sign that the real estate market is maturing.

It is claimed and advertised on TV that developers are introducing innovation into their payment plans expanding it over number of months and reducing the instalment size.

The move is also welcomed as a way of lessening the impact of the economic downturn.

The extended plan being offered to existing customers gives 90 months to pay 85% of the value of the property once a threshold of 15 per cent of the purchase cost has been paid and is the first of its kind to be introduced by a private developer.

No doubt ‘Developers can’t afford to be as stiff as they were before. The market is maturing and heading towards the end-user,’ but still some end-users feel that they can loos their investment if market could not mature.

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