Worst-hit global housing markets starting to recover: Knight Frank group chairman Alistair Elliott

The world’s worst-hit housing markets have begun to recover, according to Alistair Elliott, the newly appointed Knight Frank senior partner and international group chairman.

“The search for safe haven investments has continued to propel house prices higher in key global cities; some of the markets worst hit by the global financial crisis appear at long last to be recovering,” he says.

The latest reports suggest property markets in the United States and the United Kingdom are improving.

In the United States, CoreLogic (owner of RP Data) released its January HPI report, showing home prices (including distressed sales) increased by 9.7% nationwide compared to January 2012. This change represents the biggest increase since April 2006 and the 11th consecutive monthly increase in house prices nationally.

Excluding distressed sales, home prices increased on a year-over-year basis by 9% in January 2013 compared to January 2012. 

In the UK, data from the Office of National Statistics (ONS) also indicates that the property market is recovering.

House prices increased by 2.2%t in the twelve months to January 2013, down from a 3.3% increase in the twelve months to December 2012. House price growth remains steady across most of the UK, although the ONS found that prices in London are increasing while prices in Northern Ireland are falling.

They also found that prices paid by first-time buyers in January 2013 were 2% higher on average than in January 2012. For existing owners, prices increased by 2.2% for the same period.

The Council of Mortgage Lenders (UK) recorded 38,300 home loans purchased in January, the highest January total since 2008. This represents an 11% increase from January 2012.

Amongst the 38,300 loans advanced in January, 15,900 loans (worth £2 billion) were advanced to first-time buyers. This is an increase of 24% compared to January last year (12,800 loans), making it the largest January total since January 2008 where 17,700 loans were advanced.

In Canada, the outlook for the housing market seems less optimistic.

While it showed signs of stabilisation in January this year as prices continued to increase, total sales fell from a year before as a result of tighter mortgage rules that came into effect in mid-2012, according to the Canadian Real Estate Association (CREA).

However, the signs of stability abated in February as sales dropped 15.8% from a year ago, and 2.1% from January, prompting CREA to cut its sales outlook for 2013 for the third time since mid-2012.

The association forecast 441,500 sales for 2013, a decline of 2.9% from 2012.