According to a study by Hometrack, the ten percent decline in property prices in Great Britain has made it possible for ten percent of those who were earlier squeezed out of the market to now buy two or three-room flats. According to the study, 28 percent of the country's young workers cannot afford to buy their own homes. The situation is the worst in London, while Northeast England is at the other end of the scale, where this ratio is just 17 percent.
The study also warns that while property prices are going down, the opportunities for entering the property market remain very restricted. The costs of repaying an average mortgage loan grew by 12 percent last year, which means that first-time homebuyers spend 34.5 percent of their average wages on repaying the mortgage loan (this is even higher that the level recorded during the property boom of 1990). The difference between the costs of renting and repaying a mortgage have meanwhile remained largely constant over recent years - in 2006, a monthly rent amounted to two-thirds of the 100 percent mortgage repayment of a similar home, while this ratio was 68 percent in 2007.
Other areas show positive trends as well. According to a study by The Economist, based on data from credit rating and property market agencies, the number of homes purchased by foreigners in Singapore increased by 71 percent last year. Interesting to note is the difference between two countries which showed mostly parallel growth over the past decade, Spain and Ireland (the number of home constructions grew by 187 percent in the former and 177 percent in the latter between 1996 and 2006) - while prices fell 8.9 percent in Ireland in the past quarter, Spain showed a 3.8 percent rise.
At the same time, the crisis may just be rippling over into Australia and New Zealand now - both countries recorded significant growth in prices over the past ten years, reaching for example 82 percent in New Zealand, 70 percent faster growth than the rise in local average wages. The property market bubble of the Pacific region could easily burst in the near future.
