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The housing crisis contagion reached more countries. Among the 32 countries in the Global Property Guide’s survey of house prices, 27 recorded price falls during the year to the end of the first quarter of 2009, in real terms.

The Global Property Guide uses price-changes after inflation, giving a more realistic picture than the (more upbeat) nominal figures usually preferred by real estate agents.

During the year to end-Q1 2009, price falls of more than 10% occurred in 12 countries, worse than the previously worst-ever year to end of last quarter of 2008 (8 price falls above 10%).

However, only 7 countries saw price falls of above 5% during the single quarter (i.e., Q1 2009), versus 8 countries during the previous quarter (though some individual price declines were much higher during this quarter than in the previous quarter).

AMAZING PRICE DECLINES IN LATVIA, DUBAI, AND SINGAPORE

Latvia is in surprisingly deep trouble. Average apartment prices in Riga declined an astonishing 50% over a year earlier, to €747 per square metre, with a 30% drop during the quarter. Latvia is in deep recession, with its economy contracting 18% in Q1 2009.

Dubai’s house prices dropped 35% over a year earlier, and 42% over a quarter earlier. Dubai’s economy is closely tied to the global market. As uncertainties piled up, demand for properties collapsed. Many developers have delayed or postponed construction of projects. Credit has also been tight. Interest rates have increased, and loan-to-value ratio reductions have been imposed.

Among Asian countries, Singapore’s housing market suffered the most. House prices plunged 23% in real terms over a year earlier, and 13% over a quarter earlier. This is the biggest decline since 2000. Singapore is heavily dependent on exports. When the global financial crisis began, demand waned. In Q1 2009, Singapore’s economy contracted by 10.1%, mainly due to a decline in manufacturing production.