High-end realtors Knight Frank recently published their property porn 'Prime International Residential Index' results for 2009. Some graphics (click for something legible):
And a cherry-picked piece of their commentary which, unsurprisingly even for the house-trained of their species, Knight Frank generously balance out in the rest of the report.
"We have to consider the current support for market growth created by ultra cheap money. In fact it is not just property markets that have succumbed to exuberance – equities and commodities saw prices pushed up sharply during 2009.By the way, Barbados (thanks to its west coast attractions) was not the bottom performer in the Knight Frank charts. Palma (-22%), Dublin (-25%), western Algarve (-30%) and, for some reason, Dubai (-45%) managed to do worse.
Rock-bottom interest rates and the “creation” of money via government stimulus packages have led to an injection of liquidity into the world economy, which has found, inevitably, its way into asset markets, including property, gold and shares.
Low interest costs have protected potentially distressed owners and reduced the supply of property for sale. At the same time, low savings rates have encouraged the wealthy to move investments out of cash and into property in the search for acceptable yields. This has driven demand for property higher and, set against tight supply, has served to push values upwards in many locations.
Ironically, the unintended consequence of government economic stimulus packages has been to support demand and pricing in top-end residential markets – probably not something governments would readily admit to."