The world 's housing markets posted mixed signals during the full year to Q3 2012, according to the latest survey of global house price trends by the Global Property Guide. The bad news is strongly concentrated in Europe. The scale of the European downturn, the sheer size of the downward pressure, continues to surprise.

Good news:

  • The U.S. housing market recovery continues. The Federal Housing Finance Agency (FHFA) seasonally-adjusted purchase-only house price index rose by 2.31% year-on-year in Q3 2012, the highest growth seen since Q2 2006. The nationwide seasonally-adjusted S&P/Case-Shiller home price index also rose by 1.92% during the year to Q3 2012, in sharp contrast with its 7% year-on-year decline seen in Q3 2011.
  • Dubai, UAE, has rebounded strongly. The price index for all residential properties surged by 14.43% during the year to end-Q3 2012, as compared to a meagre year-on-year increase of 0.96% seen in the same period last year.
  • Pacific housing markets are now recovering. New Zealand 's median house price rose by 5.19% during the year to end-Q3 2012, in sharp contrast with the 4.39% year-on-year decline in Q3 2011. Likewise, Australia 's housing market is also improving, with house prices in its eight major cities falling by just 1.57% year-on-year in Q3 2012, the lowest decline since Q4 2010.
  • Positive news for some individual European housing markets. House price falls in Ireland may be decelerating. Ireland 's residential property price index fell by 13.17% year-on-year in Q3 2012, the lowest decline since Q1 2011. In addition, house prices have risen significantly in Austria, Turkey, Latvia, Germany, Iceland and Finland.

Bad news:

  • Many European housing markets remain extremely depressed, and continue their rapid spiral downwards. House price falls are accelerating in Greece, Spain, Netherlands, Portugal, Croatia and Lithuania. Of the 23 European countries included in the survey, 14 countries recorded house price falls while only 9 countries have seen house price increases. The nine weakest housing markets in our global survey are all in Europe.
  • The Asian housing market surge has weakened. Seven of the 10 Asian housing markets included in our survey performed more poorly this year than the previous year. But Asia 's biggest housing market, China, is recovering, judging by the latest quarter 's figures.

Momentum: In inflation-adjusted terms, 23 housing markets have shown better year-on-year figures in Q3 2012 than in the same period last year, while 20 housing markets have shown poorer performance. However the nominal figures are slightly more disappointing-25 housing markets performed more poorly while only 19 performed better.

Conclusion: Of the 44 countries for which quarterly house price figures are available, house prices fell in 23 countries, and rose in 21 countries during the year ending in the third quarter of 2012, again in inflation-adjusted terms.

Inflation-adjustment: The Global Property Guide's statistical presentation uses price changes after inflation, giving a more realistic picture than the more upbeat nominal figures usually preferred by real estate agents. Nominal figures can be misleading, as suggested by the fact that year-on-year in Q3, nominal house prices rose in more countries (27 countries) than fell (17 countries).

North America: U.S. recovers, Canada softens

The United States housing market recovery continues. The FHFA 's seasonally-adjusted purchase-only house price index rose by 2.31% year-on-year in Q3 2012, the highest growth seen since Q2 2006. During the latest quarter house prices increased 0.86%. As a reminder, these figures are adjusted for inflation, as are all subsequent figures except those for Ukraine.

This picture of recovery is supported by the S&P/Case-Shiller home price index, which rose by 1.92% during the year to Q3 2012, its second quarter of year-on-year gains. This is in sharp contrast with the 7% year-on-year decline this index saw in Q3 2011. During the latest quarter the Case-Shiller index rose by 0.89%.

Housing starts, an indicator of construction activity, soared by 34.8% year-on-year in September 2012, the strongest gain since July 2008. In October 2012 builder sentiment was at its highest since May 2006, according to the National Association of Home Builders.

Sales of previously occupied homes are near five-year highs, rising by 2.1% in October 2012 from a year ago, according to the National Association of Realtors.

The U.S. economy is expected to expand by 2.2% in 2012, after registering real GDP growth of 1.8% in 2011 and 2.4% in 2010.

On the other hand Canada 's housing market is now slowing, the government having recently imposed another round of stricter mortgage rules to cool the housing market. House prices in Canada 's eleven major cities rose 2.92% during the year to Q3 2012, and by 2.07% during the latest quarter.

Sales of existing homes fell 15% year-on-year in September 2012.

House prices in Canada surged by 62% from Q1 2000 to Q1 2008, and rose by another 18% from Q2 2009 to Q2 2012, despite several housing market cooling measures imposed by the government.

"The housing market has softened somewhat in part because of steps that I 've taken and I 'm happy about that," said Canada 's finance minister Jim Flaherty.

European housing markets generally bleak

The scale of the European downturn, the sheer size of the downward pressure, continues to surprise. Of the 23 European countries included in the survey, 14 countries recorded house price falls while only 9 countries have seen house price increases. To make the picture more dismal, the nine weakest housing markets in our global survey are all in Europe.

Ireland remains the world 's weakest housing market in Q3 2012. However, house price falls now appear to be decelerating in Ireland. House prices dropped 13.17% during the year to Q3 2012, the smallest decline since Q1 2011. House prices dropped by just 0.03% in Q3.

Not so far behind was Greece, with house prices plunging by 12.47% during the year to Q3 2012, the steepest year-on-year decline since 1998. House prices dropped 1.03% during the latest quarter. Greece is already on its fifth year of recession with real GDP expected to contract by 6% this year.

House price declines in Spain are also accelerating, as the economy sinks deeper into recession. House prices plunged by 11.87% during the year to Q3 2012, the biggest decline since Q4 1992. House prices dropped 2.78% during the latest quarter. The Spanish economy is expected to contract by 1.3% this year and by another 1.4% in 2013. The country 's deficit is projected to remain high, at 8.1% of GDP by end-2012. Overall unemployment is at a record high, at 25%.

The Netherlands comes fourth on the list of the world 's worst performers. House prices fell 11.43% year-on-year in Q3 2012, the sharpest decline since Q1 2009. On a quarterly basis, house prices fell 3.37% during Q3.

Romania 's housing market remains depressed. The average selling price of apartments plunged 12.76% year-on-year and fell 4.61% during the latest quarter. Romania 's economic growth is expected to be flat this year with real GDP actually declining 0.5% in Q3 2012 from the previous quarter. The economy fell into recession in Q1 2012 before seeing a minimal growth in Q2.

Many other European countries continue to suffer. These include Portugal, with house prices falling by 9.7% during the year to Q3 2012, Zagreb, Croatia (-8.03%), Warsaw, Poland (-7.64%), Bulgaria (-6.84%), Ukraine (-4.41%), Vilnius, Lithuania (-4.36%), Slovakia (-4.13%), Russia (-3.98%), UK (-3.97%), and Sweden (-3.17%). All of these, except Slovakia and Sweden, recorded house price falls during the latest quarter.

Some strong European housing markets relieve the gloom. Austria 's housing market remains ebullient, with the residential property price index rising by 7.53% during the year to Q3 2012, after rising by 11.26% year-on-year in Q2 and 8.24% in Q1 2012. House prices rose by 0.50% during the latest quarter. Vienna 's residential property price index rose a dramatic 13.10% during the year to Q3 2012.

Norway 's house price index rose by 6.55% during the year to Q3 2012, and by 1.27% during the latest quarter.

The upsurge in these two countries' housing markets was so strong as to propel them into fourth and fifth place in the worldwide league table.

Other European countries which saw moderate year-on-year house price increases to Q3 2012 included Turkey (4.96%), Riga, Latvia (3.38%), Switzerland (3.27%), Germany (3.16%), Estonia (2.62%), and Iceland (2.28%).

Finland 's housing market is also improving. The average price of apartments in old blocks of flats rose by 0.52% during the year to Q3, the first year-on-year growth after four consecutive quarters of house price falls.

Dubai, UAE: now the world 's strongest housing market

Dubai is back! After three years of house price falls, Dubai 's housing market is now recovering fast, in line with its economic upturn and improving investor confidence.

Dubai 's all-residential properties index surged 13.46% during the year to end-Q3 2012, in sharp contrast with the 1.8% year-on-year decline seen in the same period last year.

"We are definitely seeing a return in confidence to the Dubai real estate market," said Alan Robertson, CEO of Jones Lang LaSalle Mena. "This is still Dubai and it 's as ambitious as ever but we are also seeing a more mature and considered approach which is only going to benefit the long term health and credibility of the real estate sector amongst domestic and international investors and stakeholders."

Israel 's housing market up a little

In Israel the average price of owner-occupied dwellings rose by 0.79% year-on-year to Q3 2012, after three consecutive quarters of year-on-year house price declines, according to Israel 's Central Bureau of Statistics.

Asian housing markets somewhat duller

Seven of the 10 Asian housing markets included in our survey performed more poorly this year than the previous year. The number of countries with rising house prices now equals market falls. Though numerically the rises tend to be larger than the falls, latest quarter figures suggest weakness ahead in some countries.

In Singapore, house prices continued to fall as government market-cooling measures took effect. During the year to Q3 2012, house prices dropped 2.88%, after falling 3.14% in Q2 and 1.36% in Q1 2012. House prices fell 0.34% during the latest quarter, Singapore 's fifth consecutive quarter-on-quarter house price decline.

Other Asian countries and capital cities which saw modest year-on-year house price falls to Q3 2012 included Shanghai, China (-2.34%), Tokyo, Japan (-1.94%), Thailand (-0.83%), and Indonesia (-0.23%).

Four Asian countries experienced slowing house price increases, as compared to the same period last year.

In India's capital New Delhi, house prices rose 5.31% during the year to Q3 2012, in sharp contrast with the 22.68% year-on-year rise seen in the same period last year. House prices fell 0.06% during the latest quarter.

In Malaysia, house prices rose by just 5.86% during the year to Q3 2012, after rising by 9.27% in Q2 and 9.51% in Q1 2012. House prices dropped 2.11% during the latest quarter.

In Greater Taipei, Taiwan, the Lutheran house price index increased by 2.32% year-on-year (from 7.65% year-on-year rise in Q3 2011), but fell 0.06% quarter-on-quarter in Q3 2012, according to Sinyi Real Estate Planning and Research.

In Hong Kong, house prices surged by 10.76% year-on-year to Q3 2012, but this is lower than the annual price increase of 12.92% seen in the same period last year. During the latest quarter Hong Kong 's house prices rose by 6.69%.

The only exception is the Philippines, with house prices in Makati CBD rising by 4.63% year-on-year in Q3 2012, an improvement from the meagre growth of 0.64% during the same period last year. House prices increased 0.62% during the latest quarter. The Philippines' economy is expected to expand by a healthy 4.80% this year.

Pacific: New Zealand remains strong, Australia improving

New Zealand 's housing market remains robust. Its median house price rose by 4.15% during the year to end-Q3 2012, in sharp contrast with the 4.3% year-on-year decline in Q3 2011.

Property prices in New Zealand are expected to continue rising, mainly fuelled by the rebuilding plans in Canterbury. New Zealand's official cash rate has been kept at 2.5% since March 2011 by the Reserve Bank of New Zealand.

On the other hand house prices in Australia continue to fall, but at a slower pace. House prices in the country 's eight major cities were down by 1.57% year-on-year in Q3 2012, the lowest decline since Q4 2010. On a quarterly basis, house prices dropped 1.02% during the latest quarter. The Reserve Bank of Australia cut the benchmark rate to a record-low of 3% in early December 2012.

Brazil's housing market strong, but momentum slowing

Brazil remains the second best performer in our survey. In Sao Paulo, Brazil, house prices rose by 12.46% during the year to end-Q3 2012, lower than the 20.27% year-on-year increase seen in the same period last year, according to the FIPE-Zap price index. House prices in Sao Paulo were up 2.91% during the latest quarter.

In early-December 2012, the government extended tax breaks to the construction industry in a new effort to boost the weakening economy.

House prices in Sao Paulo skyrocketed by about 151% between Q1 2008 and Q3 2012. Two forthcoming major international sporting events have recently boosted the economy - the hosting of the 2014 Soccer World Cup, and the 2016 Olympics.

South African housing market mending

In South Africa the price index for medium-sized houses rose by 2.02% quarter-on-quarter in Q3 2012, the fastest quarterly increase since Q1 2010, fuelled partly by lower interest rates. However, during the year to Q3 2012 house prices were down by 2.47%, the eighth consecutive quarterly year-on-year house price fall, according to Absa Group..

A full-blown housing market recovery remains doubtful, because of the slowing economy and domestic social unrest.

Global Property Guide