The recovery of European real estate is gathering pace, with average house price decline in the region slowing. Real estate values fell by just 0.1 per cent in the second quarter of 2010, compared to a fall of 4.1 per cent in the first quarter of the year.
Prices increased in 69 per cent of worldwide locations in the year up to the end of June, up from 19 per cent a year earlier, the latest Knight Frank Global House Price Index also shows.
And, according to Liam Bailey, head of residential research at Knight Frank, prices are beginning to return to something close to a sustainable level as the relationship between prices, rents and incomes falls in line with the long-term average.
"The potential risks to future growth are many and varied. For western economies the availability of new funding, the scale of austerity measures, earnings and employment growth will prove critical to the health of their housing markets. In Asia, a lot hinges on how far governments intervene in fiscal policy."