Global house prices drop further

House prices around the world dropped further in the first quarter of 2009 as the global recession worsened, with Latvia seeing the largest falls.

Out of 32 countries studied, 27 saw price falls over the year to the end of March 2009, property researchers the Global Property Guide said.

Apartment prices in the Latvian capital Riga fell 50% over the year.

The guide uses price changes after inflation to try to give a realistic picture of the property market.

Latvia is deep in recession - its economy contracted by 18% in the first quarter of 2009 compared with the same period a year earlier.

The second biggest fall was seen in Dubai, where prices were down 35% over the year.

It indicates the extent to which Dubai's recent property boom has come to an end in the face of the worldwide recession.

Prices had shot up by 59.7% the previous year.

There were some countries where prices are rising. House prices in Switzerland are 4.3% higher than a year earlier. Reduced interest rates and a surge in the number of foreign residents helped keep property demand stable, Global Property Guide said.

House prices in Thailand, Austria and Israel also bounced back in the first quarter.

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