Knight Frank’s Global House Price Index for the fourth quarter of 2008 reveals that the credit crunch has now affected virtually every global housing market.

Over 80% of the locations in the index recorded negative price growth in the final three months of 2008, compared with 27% in Q4 of 2007. Although house prices increase 10% in seven countries (all within EMEA) during 2008, values have now started to fall in six of these.

Dubai was the strongest performer in 2008, rising almost by 60%, but much of this gain may well be wiped out in 2009. Latvia saw the biggest annual and quarterly falls, with prices plummeting 16% in the final quarter of 2008 and 33.5% overall.

Meanwhile, a new report from Frank Knight suggests that the current crisis in the housebuilding industry could result in significant changes to the way new homes are financed, built and planned within the Britain. The Future of Residential Development, a 55-page investigation compiled following interviews with over 50 key figures in development, planning, economics and academia, is the first attempt to provide a comprehensive picture of how the credit crunch and recession are changing the residential development sector.

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