According to a number of commentators and leading property portals there are signs of recovery in the international property market.  However, they do have a vested interest in trying to convince people to buy and sell in order to increase their web traffic or agent fees.  So is it true or is it hype that the foreign property market is showing signs of recovery.

I suppose the easiest way to identify the truth is to look at objective statistics, but then that is probably a contradiction in terms as the infamous quote lies, dam lies and statistics which bears witness to the manipulative properties of data. 

For instance, an official Spanish property price source the IMIE index shows that property prices have fallen by only 15% from their 2006 peak to September 2009.  This sounds a little low given my experience and I am sure that of a lot of foreign owners.  In reality the Spanish market, along most of the mainland coast, is down 30%-50% on 2006 prices. It is only when you read the small print that you find out that the official statistics refer to property valuations which bear no resemblance to reality in Spain.

Taking into account bias and misleading statistics it still appears that most countries are still on a downward spiral.  However there is a small glimmer of hope for all those optimists among us.  Mainly it has to be said in those countries that appeared to come out of recession first or were not that badly affected by it.  There around ten countries which have shown a modest growth in property prices in the first half of 2009.  These are Australia, China, France, Hong Kong, Israel, Indonesia, New Zealand, Norway, Sweden and Switzerland.

The largest growth was in Israel with growth of 8% on 2008 prices. Switzerland was next with a 5% increase and China with a 2% increase.  The rest were marginal increases or arguably temporary blips.

This all sounds very encouraging but contrast this positive spin with data that shows that other countries, which are more popular investment sources for the UK and Irish investor, are still falling.  Latvia tops the pole a thumping 60% year on year fall for 2009. The next worst fall was Dubai, a very popular spot, with a fall of 49%.  Other substantial drops include Iceland, Bulgaria and Singapore all dropping over 20% in the first half of 2009.

Other popular investment spots such as the US are down 5%, whilst Spain was still down another 8%.  On the up side Portugal is slowing to an encouraging 0.4% decrease.  However, with the UK falling by 17%, Ireland by 8% and the main property drivers of the US still down 5% and Japan still in freefall at 13% only an eternal optimist would predict a complete bounce back any time in 2010.

In summary are there signs of a recovery in world property prices.  The key indicator of improvement is the markets momentum, thus the question is has the number of countries that did better this year, than the previous year, increased.  As ten countries improved their year-on-year performance in 2009, compared with the previous year, then it might be argued that there are signs of an economic recovery.  However, I will not be celebrating until the UK and Ireland slow down and there are definite signs of recovery along the Med.