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Global Property Guide - Biggest Fall In House Prices Worldwide...

IRELAND had the fourth biggest fall in house prices in the world this year...

Only Estonia, the US and Latvia have been harder hit by the drop in property values, a study by research group Global Property Guide shows.

House prices in Ireland fell by 9.6pc in the year to June, according to the index. But when the level of inflation is taken into account, the drop was 13.9pc.

The compilers of the index point out that "in Ireland, the 2009 Budget will include a 'stimulus package' helping first-time homebuyers".

Latvia recorded the biggest fall in prices, after inflation was taken into account, with a 33pc drop. In the US, the inflation-adjusted fall for the year to June was 19pc.

A host of European countries have recorded much smaller falls in house prices than Ireland. In Britain, the inflation-adjusted drop was nearly 10pc and Portugal recorded a fall of 8pc.

Spain, which is now experiencing a sharp construction slowdown, recorded an inflation-adjusted decline of 2.5pc.

In a commentary with the report, the authors state that the Baltics, the US, Britain and Ireland led the global decline in house prices in the year to June.

There are indications that the slowdown in house prices is getting worse, according to research on globalpropertyguide.com.

Declines
At this stage last year, only five countries out of 33 had seen annual declines in house prices in real terms. This year's figure is 21, according to the online research firm.

The efforts to rescue the world's housing markets are becoming increasingly global, the study points out.

In the US, the authorities are attempting to put together a $700bn (€475bn) bail-out package to purchase almost all of the country's bad mortgage debt in an effort to unfreeze the nation's credit markets.

The British government has raised its stamp duty exemption threshold and unveiled a £1bn package to assist first-time home buyers and households struggling with their mortgage payments.

Last week's house price index from Permanent TSB/ESRI shows that the rate of house price decline in this country is rising again after several months of slowing falls.

Prices fell 0.9pc in August, to take the fall for the year to 9.9pc, according to the ESRI/Permanent TSB house price index.

The 0.9pc decline compared with reductions of 0.2pc in July, 0.6pc in June and 1.2pc in May.

Report by Charlie Weston Personal Finance Editor - Irish Independent

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